Tesla shares slide as Elon Musk cuts 3,000 jobs
Electric carmaker claims lay-offs are ‘crucial’ to Model 3 production
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.
Subscribe to The Week
Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.
Sign up for The Week's Free Newsletters
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
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.
Create an account with the same email registered to your subscription to unlock access.
Sign up for Today's Best Articles in your inbox
A free daily email with the biggest news stories of the day – and the best features from TheWeek.com
-
'New arrivals are more than paying for themselves'
Instant Opinion Opinion, comment and editorials of the day
By Harold Maass, The Week US Published
-
6 stylish homes in Portland, Oregon
Feature Featuring a wall of windows in Collins View and a historic ballroom in Portland Heights
By The Week US Published
-
What's next for US interest rates?
The Explainer Stubborn inflation forestalls anticipated rate cuts
By Becca Stanek, The Week US Published
-
Is Google's new AI bot 'woke'?
Talking Points Gemini produced images of female popes and Black Vikings. Now the company has stepped back.
By Joel Mathis, The Week US Published
-
Elon Musk's most controversial moments
The Explainer The business mogul has a long history in the hot seat
By Justin Klawans, The Week US Published
-
2023: the year of the AI boom
the explainer This year, generative artificial intelligence bypassed the metaverse and became the next big thing in tech
By Theara Coleman, The Week US Published
-
Elon Musk's 'frivolous' but precedent-setting free speech fight with Media Matters
Talking Point The lawsuit is just the latest in Musk's ongoing tension with social media watchdogs
By Theara Coleman, The Week US Published
-
Inside Sam Altman's 'extraordinary firing' from OpenAI
The Explainer AI superstar joins Microsoft after 'philosophical disagreement' with his old board that stunned tech world
By The Week UK Published
-
How Grok, Elon Musk's 'rebellious' AI bot, differs from the others
The Explainer Musk developed the bot as a competitor to ChatGPT
By Justin Klawans, The Week US Published
-
Twitter's year of Elon Musk: what happens next?
Why Everyone's Talking About 'Your platform is dying', says one commentator, but new CEO is aiming for profitability next year
By Chas Newkey-Burden, The Week UK Published
-
Will Musk's rebranding ruin Twitter?
Talking Point Is Musk dooming his own company by scrapping its valuable brand, or is it all leading to something bigger?
By Harold Maass Published