Tesla stock suffered a 5.5% price drop on Tuesday. The drop was apparently spurred by Elon Musk’s announcement of layoffs affecting two highly-placed executives and several hundred regular employees. The loss claws back some of the big gains for the stock on Monday, which came in response to Elon Musk’s recent trip to China.
China is Tesla’s second-biggest market, globally speaking. Musk’s visit prompted a single-day 12% gain in stock price on Monday. The trip yielded reports that Tesla had secured permission to roll-out the company’s autopilot suite in the country, up to and including full self-driving capabilities.
Among the staffers laid off were Rebecca Tinucci, who was in charge of Tesla’s Supercharger program, and Daniel Ho, who was responsible for overseeing product development and vehicle programs.
Additionally, approximately five hundred people are set to be laid off from Tinucci’s division. Tesla’s public policy team will also see significant trimming—the vice president of that division, Rohan Patel, already departed o April 15, according to the announcement email from Elon Musk.
These layoffs follow Musk’s avowed strategy to become “absolutely hardcore” about budget reduction and employee retention. He has previously stated that he would request the resignation of any executive to keeps “more than three” people on staff who don’t meet his stringent standards of necessity, excellence, and trustworthiness.
The cuts come on the heels of a 10% global workforce reduction two weeks ago, aimed at culling duplicated positions and job functions across the company.
Telsa has been battling a slump in vehicle sales, with earnings reports missing consensus forecasts for Q1 of 2024. In the midst of all the bad news and management shakeups, plans for a cheaper, more accessible model have buoyed investor sentiment somewhat.
Nonetheless, Tesla’s stock price is 30% lower than it was at the start of the year, and Wall Street analysts have lowered their ratings, price targets, and recommendations regarding the stock as a result of the company’s flagging retail performance.
