Tesla profits nosedive as more job cuts announced
Tesla profits nosedive as more job cuts announced
The EV maker brings forward launch plans for new models as profits drop by more than half.
Tesla has seen its profits more than halve this year, and says it will bring forward the launch of new models after announcing thousands of job cuts to try to reverse its fortunes.
Despite plans to bring forward new models originally planned for next year the firm is cutting its workforce.
Tesla said it would lose 3,332 jobs in California and 2,688 positions in Texas, starting mid-June.
The cuts in Texas represent 12% of Tesla's total workforce of almost 23,000 in the area where its gigafactory and headquarters are located.
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I wonder why their after hours stock price skyrocketed.
Dead cat bounce?
When a stock drops by a lot there’s usually a low point at which some investors will start buying it again because it got so cheap. This drives the price higher but only temporarily. This is called the “dead cat bounce.”
There’s a pandemic term I haven’t seen in the wild for a hot minute.
"Dead cat bounce" has been a term in stocks for 30+years...
TIL thanks
I was going to to ask the same thing. Up over two dollars in premarket trading.
My only guess is that there were rumors of layoffs, and the stock market LOVES when the middle class gets fired.
It was because they announced they were speeding up their plans for their affordable next gen vehicle earlier than already announced, which was H2 2025
Now it's late 2024/H1 2025
They are ditching their next gen "unboxed" production method to do this however and leaving that for the robo taxi. The vehicles will be a hybrid if their next gen tech and existing tech. They claim the new models to be released will be built on the existing manufacturing lines, getting them to over 3mil vehicles a year.
These will be more akin to a gen 2.5.
Robo taxi will be gen 3
If their unboxed plans work with the taxi, they'll use it for other vehicles in the future.
Edit: they basically derisked the cheaper vehicles by foregoing the risky new production method that would make it cheaper in the long run, by figuring out how to use their existing lines, also making it cheaper. But in the grand scheme of things i imagine this hybrid way will have less margins than a successfully implemented new way.
Also, some of the price crash was from Reuters reporting they abandoned the cheaper vehicle in favor of robotaxi and there's been uncertainty for weeks now ok the topic, until now.
Thanks for the details! All I saw anywhere was the bad news, but this does sound like a good reason for optimism if you can trust this company.
if you can trust this company.
That's the key point. After all the other delays, they need to show they can do something on time now to gain some of that back.
It feels like this announcement was 100% to keep the shareholders happy with probably very little planning ahead of time.
I was thinking it's more like their contingency plan for if unboxed was a catastrophe.
If they can actually pull off the accelerated, shared manufacturing lines plan, it feels like it's too fast to be on a whim with no planning.
I do agree though it's probably to keep shareholders happy as the cheaper EV landscape unfolds and they were falling behind.