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Business News/ Companies / News/  Tesla Layoff: Elon Musk's EV maker to lay off 693 employees in Nevada after cars price cuts
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Tesla Layoff: Elon Musk's EV maker to lay off 693 employees in Nevada after cars price cuts

Tesla Layoff: Earlier in the week, the company filed the notice with the Nevada Department of Employment, Training, and Rehabilitation in compliance with U.S. labour laws, requiring companies with 100 or more employees to provide 60 days' notice before major layoffs.

Tesla to lay off 693 employees in Nevada, government notice sayPremium
Tesla to lay off 693 employees in Nevada, government notice say

Tesla Layoff: Tesla, Inc. is preparing to lay off 693 workers at its Sparks, Nevada location, according to a government filing on April 27. The downsizing effort represents more than 10% of its total workforce around the world and comes in response to declining sales and increased competition within the electric vehicle market, as per Reuters.

Earlier in the week, the company filed the notice with the Nevada Department of Employment, Training, and Rehabilitation in compliance with U.S. labor laws, requiring companies with 100 or more employees to provide 60 days' notice before major layoffs or closing a facility, the report added.

Also Read | Tesla Price Cuts: Elon Musk's automaker company slashes prices in China, US amid inventory rise as sales slump

The announcement comes after Tesla revealed huge layoffs in Texas and California of up to 6,020 workers. This is part of a greater cost-cutting program amidst the changing dynamics that the electric carmaker is adapting to in the market. As of the latter part of 2023, this very same Tesla company had more than 140,000 people employed worldwide; it is to say that the current layoffs represent a huge percentage of its workers, as per the report.

Tesla Price Cuts

In response to plunging sales and rising inventories, Tesla Inc. announced cutting its electric vehicle prices in China and the US starting on April 21. The strategic realignments focus on the two most critical markets of the automaker and come after a disappointing first quarter, Bloomberg reported.

Also Read | US probes Tesla recall of 2 million vehicles over Autopilot, citing concerns

The price cuts came at a time when Tesla is dealing with growing challenges, from the fierce competition in the electric vehicle business. Ideally, the company hopes the move can spur sales and cut down some of the burgeoning inventory levels that are piling up as the market realizes demand at a pace slower than expected.

Tesla Inc. lowered the starting price of its Model Y to $42,990 in the U.S., the lowest entry price for the sport-utility vehicle yet. According to a Bloomberg report, the Austin-based carmaker has also cut prices for its upgraded versions of the Model Y and Model X by $2,000, establishing new record lows.

The cap of pricing moves a tumultuous week for Tesla that began with CEO Elon Musk's announcement of a global workforce reduction of more than 10%, including more than 140,000 employees. Two senior executives also left during the same week.

Making the situation worse for Tesla, the company has now announced a recall of about 3,900 Cybertruck pickups because of a problem with its accelerator pedals, which may dislodge and inadvertently speed up, potentially causing a crash.

On the corporate governance front, Tesla disclosed that it would be resubmitting, to shareholders, a $56 billion compensation package for Musk to allow for a revote; earlier in the year, this was declared void by a Delaware court. This series of events underscores a major period of churn for the electric vehicle manufacturer.

(With Inputs from Agencies)

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Published: 27 Apr 2024, 06:17 AM IST
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