Tesla shares slide as Elon Musk cuts 3,000 jobs

Shares in electric carmaker Tesla have tumbled in the wake of company chief Elon Musk announcing that around 3,000 jobs are to be cut.

In an email to staff, posted by Teslarati, the South African-born billionaire said that the firm is finding it difficult to develop EV technology cheaply enough, leaving it with “no choice but to reduce full-time employee headcount by approximately 7%”.

Given that the California-based company employs 45,000 people, the cuts equate to a loss of a little over 3,000 jobs, according to the BBC.

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Musk said Tesla’s workforce had grown by 30% in 2018, but stressed that the firm had taken on more people than it could support and that “only the most critical temps and contractors” would be retained.

He assured employees that, despite the cuts, Tesla had had its most “successful year” in history in 2018, delivering as many cars in the final quarter as it did over the whole of 2017.

However, the news rippled through the stock markets this morning. Share prices slid by around 7.2%, Bloomberg reports, lowering values to $322.40 (£249.22).

Although Tesla is one of the most prominent producers of electric cars, Musk acknowledged in the email that its products are “too expensive” compared with those offered by other EV makers.

According to The Daily Telegraph, Tesla is currently producing only highly-specced versions of the Model 3, costing around $44,000 (£34,000) each, instead of the entry-level - and less profitable - $35,000 (£27,000) version the company has promised.

Musk said the cuts were “crucial” for increasing production of its budget Model 3, which would help it retain its $35,000 price tag and still be a financially viable product for the company.