A giant company now announces unexpected layoffs in Texas, a shocking move which will affect 10% of its global workforce.
Tesla will now lay off more than 10% of its global workforce, according to a memo sent to employees by CEO Elon Musk.
The company’s shares closed down more than 5% on Monday.
“As we prepare the company for our next phase of growth, it is extremely important to look at every aspect of the company for cost reductions and increasing productivity,” Musk said in the memo obtained by CNBC.
“As part of this effort, we have done a thorough review of the organization and made the difficult decision to reduce our headcount by more than 10% globally,” the memo said.
The memo was first reported by Electrek.
Tesla had a total of 140,473 employees as of December 2023.
Tesla shares have taken a bruising in recent months, falling 31% year to date, reports CNBC.
“While electric vehicle sales are still gaining popularity worldwide, their sales growth rate has slowed especially for Tesla.
The company now faces more competition than ever.”
To end 2023, China’s BYD temporarily dethroned Tesla as the world’s top EV maker.
Chinese smartphone company Xiaomi in March said it would sell its first electric car for far less than Tesla’s Model 3.
Musk has previously recognized that China, home to a large Tesla factory, may also house the company’s strongest competition.
“There’s a lot of people who are out there who think that the top 10 car companies are going to be Tesla followed by nine Chinese car companies. I think they might not be wrong,” Musk said in November.
Some would-be Tesla customers are now skipping the brand owing to Musk’s incendiary rhetoric
Earlier this month, Tesla reported its first annual decline in vehicle deliveries since 2020, when the Covid-19 pandemic disrupted production extraneous of demand — first-quarter deliveries fell by 8.5% on the year to 386,810 in the first quarter, with output down 1.7% from a year earlier and 12.5% sequentially despite discounts and incentives offered to customers throughout the quarter.
In addition to the layoffs, Tesla executives Drew Baglino and Rohan Patel announced Monday they’re leaving the company. Baglino had worked with Tesla since its early years, starting as a firmware and electrical engineer in 2006.
Patel joined Tesla in 2016 after working as a senior advisor to former President Barack Obama on climate and other policy matters.
“Texas is proud to be the home of Tesla, and I thank them for choosing Robstown for their new lithium refinery,” said Governor Abbott last year.
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Other Economy News Today
Shoppers now mourn the loss of a massive discount retailer of the the company announced that it would be closing all 371 of its stores.
99 Cents Only customers are begging for their favorite store to stay open despite plans for all locations to shutter, reports The-Sun.
The discount chain filed for bankruptcy last week, but an industry veteran is interested in saving some stores.
99 Cents Only stores across the south-western states are preparing to close down due to bankruptcy, but shoppers are not happy.
“This needs to stay open,” a loyal customer told the Los Angeles Times.
“I make OK money, and buying here helps me. But imagine if you’re on WIC? If you’re on Social Security?
“You need a place like this. Are people now supposed to go to Ralphs? Or Target? With what money?”
Another customer told the LA Times that the affordable prices of 99 Cents Only had helped keep her family afloat.
“I could buy toys for my younger kids, my older kids could get pens for school, and I could do groceries for all of us. And the prices, of course.”
“Well, everything is more expensive nowadays, so I guess this had to end,” she added.
99 Cents Only filed for Chapter 11 bankruptcy protection Sunday, April 7.
In a statement, the company said inflation had made it business model unsustainable.
The company’s Interim Chief Executive Officer Mike Simoncic remarked on the announcement, stating the following:
“The last several years have presented significant and lasting challenges in the retail environment, including the unprecedented impact of the COVID-19 pandemic, shifting consumer demand, rising levels of shrink, persistent inflationary pressures and other macroeconomic headwinds.”
99 Cents Only has 371 locations spread across California, Arizona, Nevada, and Texas.
Since its first store opened in 1982 in Los Angeles, it has served as a local rival to Dollar Tree and Dollar General.
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Also Read: A Massive Bank Is Now Closing Nine More Locations
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