Amidst the news of coming to India, Elon Musk’s company Tesla has announced that it is going to fire more than 6 thousand people. The employees who will be laid off are based in California and Texas. The company has also recently announced the results of its last quarter. In such a situation, let us know why his company is doing layoffs.
Tesla, which has lost the status of the largest EV company in the world, is currently facing challenges. The talk of the company coming to India has been going on for the last several years. After Elon Musk’s meeting with Prime Minister Modi, it was also decided that Tesla is coming to India. But last week once again it came to a halt. On the other hand, Tesla is continuously making layoffs all over the world. Just 10 days ago, Tesla had announced to reduce the global workforce by 10 percent. Today the company has announced that it is going to show the exit to more than 6000 employees. Let us understand what is the reason for this…
Elon Musk was going to come to India
Last week, Elon Musk was going to visit India, during which he was also going to announce investment plans worth billions of dollars. But suddenly news came that Musk is not coming to India at the moment. Actually, before coming to India, the world’s third richest businessman Elon Musk had suffered a big shock. This blow was worth more than Rs 24 lakh crore. The market cap of the company has also fallen badly below 500 billion dollars. Due to which he had to cancel his India tour once again.
However, he explained the reason behind this on his X handle. He said that the trip to India is getting delayed due to Tesla obligations. He can come to India by the end of this year. According to the information, Elon Musk had already fixed the date for releasing Tesla’s quarterly results. In such a situation, there was a possibility that the quarterly results would be delayed after the visit to India. This is the reason why Elon Musk has postponed his visit to India. However, when will he arrive by the end of the year? No information has been received regarding this yet.
Sword on more than 6 thousand jobs
The company released the March quarter results on Tuesday. Before that the company informed about its plan to lay off thousands of employees. According to Tesla’s plan, a total of 6,020 employees are going to be affected by the layoffs. The employees who will be laid off are based in California and Texas. In California, 3,332 people are going to lose their jobs, while in Texas, 2,688 employees are going to be laid off. 285 employees will also be laid off from Tesla’s Buffalo plant in New York.
Why are layoffs happening?
Tesla, which has lost the status of the largest EV company in the world, is currently facing challenges. Due to low sales of electric vehicles, Elon Musk’s company Tesla has suffered a big decline in profits this quarter. The company has registered a decline of 55% in terms of earnings between January and March as compared to the same quarter last year. During this period, the company earned a total of $21.3 billion and its profit was $1.13 billion. Elon Musk has described the recent layoffs at Tesla as necessary for the company’s next growing plan. Due to declining sales of the company, now the sword of retrenchment is hanging over its employees.
According to Tesla Chief Financial Officer Vaibhav Taneja, the company has recently laid off more than 10% of its employees, which will save more than $ 1 billion annually. He also told that Tesla is trying to launch new vehicles sooner than previously mentioned. These new vehicles will be launched in the second half of 2025 and will be available at a lower price than the earlier vehicles. In fact, the company is continuously incurring losses due to which it is now resorting to layoffs.
Will more jobs be lost?
Tesla was unaffected by the global wave of layoffs until last year and was continuously hiring new employees. In the year 2021, the total number of global employees of Tesla was around 1 lakh, which increased to beyond 1 lakh 40 thousand by last year. Now the company has announced a plan to reduce it by 10 percent. This means that even after the employment of 6 thousand people, more Tesla employees may face layoffs in the coming days.
What did Musk say on the layoffs?
Elon Musk has said that the production of new Tesla vehicles will begin in late 2024 or early 2025. He also said that there is no need for a new factory or a big production line to make these vehicles. He also gave a message to the investors that those who do not believe that Tesla will perfect the technology of self-driving vehicles, then they should not invest money in Tesla.
After the decline in quarterly results, the company has announced that it will now focus more on making new and affordable vehicles. After this news, Tesla shares rose by 11% in one go. However, the thing to note is that so far this year, the overall price of Tesla shares has fallen by 40%.
Tesla sales also declined
The company has reported a 55% decline in earnings between January and March compared to the same quarter last year. During this period, the company earned a total of $ 21.3 billion and its profit was $ 1.13 billion. It is worth noting that Tesla’s sales worldwide have also declined by about 9% and the company’s total profit has also declined, which is now 17.4%.