Hi, this is Wayne again with a topic “Tesla layoffs are just one of many challenges facing the EV pioneer | TechCrunch Minute”.
Tesla is cutting staff as Executives hit the exits. What’S going on over at the EV company, now news broke yesterday that Tesla will lay off around 10 % of its staff. The cuts could impact more than 14,000 people worldwide, with some departments losing as much as 20 % of their Staffing and the layoffs come two weeks after the company said in its first quarter, it actually had its first year-over-year decline in car deliveries in the last 3 Years it did 386,000 deliveries in q1, which was off about 20 % from what it managed in the first quarter of 2023. Notably, two executives are among those leaving, there’s Drew balino, Tesla’s SVP of power, train and energy and Rohan Patel VP of public policy and Business Development. Both of those execs announced the same day as the layoffs that they would be stepping away from the company and the news of those executive exits only added to the pressure on the company’s stock, which fell around5 % after the layoffs were announced. Now, why would Tesla’s stocks sell off if the company is cutting costs which could boost profitability, because if Tesla can get by with fewer workers, there’s a chance that it needs fewer, which is not great news at a company that uses humans to help build its core Product and is already missing the Street’s growth expectations now Tesla said the cuts in staff were due to, and I quote, duplication of roles and job functions in certain areas and that the reduc uced Staffing will quote enable the company to be lean, Innovative and hungry. For the next growth phase cycle, however, according to Tech, Ren’s reporting, the cuts were actually largely due to poor financial performance and to refocus on getting the upcoming Robo taxi ready to ship, regardless of which reasoning you trust more investors were not inspired now, playing a large Role in creating the modern EV Market has not always been easy for Tesla, but until recently the company had enjoyed a period of growth and profitability for a couple years.
There Tesla really was on top of the world. Now it seems the company is facing an uphill road to financial recovery today, with falling Global deliveries, even after price Cuts, Tesla faces rapidly. Improving competition in the Chinese market. Companies like byd, are scooping up market share and putting Elon musk’s car company under new pressure and don’t forget.
Tesla has a major Factory in China and does a good portion of its Revenue there today during all of this, the company is not sitting still. Tesla is talking about a robo taxi, push recently launched at the cybertruck and is still investing in building out charging infra and the like, but the real risk here, as far as I can tell it, is that Tesla is as valuable as it is today, because investors Believe that its best days are far far off in the future and that, if it becomes harder to believe over time or fewer, people actually think that, then Tesla could start to be valued more like a car company and less like a software company which would in Turn dramatically curtail its worth and therefore greatly reduce musk’s ability to do whatever he wants whenever he wants to, and Tesla might look a little bit more like a regular car company than the future of power generation and storage that many fans expected to become more tomorrow. .