Bad News for Tesla Employees Results in Sharp Stock Drop

Tesla’s (TSLA) stock fell 3.63% on Tuesday as trading opened, bringing the price down to $155.55 per share. The stock continues to drop from week to week.

Now, Tesla‘s share price is at its lowest point for 2024. In fact, the last time Tesla was so low was back in January of 2023. Sales are down for the struggling company, and as a result, they are taking immediate action to lay off 10% of their workforce.

This will mean the company is severely cutting back production on new products, and they announced earlier in the year that they would be scrapping their proposed cheaper electric car that was designed to be affordable for almost everyone.

CEO Elon Musk said that the company is simply going through a period of restructuring that happens about every five years, and it is time again for that to take place. Two of the company’s senior employees announced they would be leaving- Rohan Patel, who was the president of public policy, and Drew Baglino, who headed up battery development for Tesla.

The last time the company announced they would be cutting a large percentage of jobs was back in 2022, when they were still dealing with the fallout from the global pandemic. At its most significant drop, the stock shares fell by 5.6% partway through Monday trading before recovering somewhat.

Tesla’s Sales Troubles

Last quarter sales for Tesla were down significantly from the previous quarter. Even though the company cut prices on many of its vehicles, the effort failed to bring in more customers.

Tesla reported that they sold about 9% fewer vehicles from January to March of this year than they did in 2023. They managed to sell 386,810 vehicles in that period, down from more than 420,000 the previous year.

Tesla still plans to reveal a computer-driven taxi by fall of this year as they move forward with some of their new product schedule and make cuts in other areas.

Since last year, Tesla has cut prices as much as $20,000 on some models as it faced increasing competition and slowing demand. The price cuts caused used electric vehicle values to drop and clipped Tesla’s profit margins.