Tesla shares fall almost 9% on Elon Musk’s plans to slash the workforce
Key takeaways:
- On Friday, Tesla shares fell more than 9% after news that CEO Elon Musk intends a hiring freeze and 10% job cuts at his electric car and renewable energy firm.
- Cowen equity researchers also reduced their Tesla car delivery estimates on Friday, noting the effects of severe Covid lockdowns that hindered production at Tesla’s Shanghai factory.
On Friday, Tesla shares closed down almost 9% on news that CEO Elon Musk plans for a hiring freeze and 10% employment cuts at his electric car and renewable energy venture.
Reuters conveyed late Thursday on an e-mail Musk sent to Tesla executives stating he had a “super bad feeling” regarding the economy and called for the employment cuts.
The report followed news Musk is demanding all Tesla and SpaceX workers to stop remote work and report on-location to the main office for a minimum of 40 hours a week.
According to its yearly financial filing, Tesla and its associates hired 99,290 people worldwide as of 2021.
This year, Tesla shares have fallen by more than 25% amid a broader sell-off in tech.
Like other automakers, Tesla has been managing parts shortages, and supply chain issues worsened by the ongoing Covid pandemic and Russia’s ruthless invasion of Ukraine.