Tesla Stock Continues its Upward Trend after News of Cutting 9% of Workforce

by | Jun 15, 2018 | NEWS

Elon Musk emailed Tesla employees Tuesday announcing a large-scale layoff of salaried employees as part of the reorganization promised at the last quarterly earnings call.

The email leaked to the press, of course, and Musk tweeted about it afterward.

According to the letter, only salaried positions will be affected, so production of the new Model 3 shouldn’t be impacted – a fact that has investors excited.

The layoffs will decrease spending at a crucial time for the company who has yet to see a profit. With the Model 3 so far behind schedule and the negative coverage of Musk’s behavior toward analysts and the press, the company needed something to show it means business, and news sources are reporting the lay-offs as evidence of Tesla’s “growing up.”

Tesla stock has been up the last few months as analysts and investors look forward to the release of the Model 3. The email slowed that upward trend down slightly, but it wasn’t enough to stop it or turn it around. Wednesday the stock opened at $346.70 up $4.00 from the previous close.

CNN reported Tuesday – after the email was released, “Tesla’s stock is still up more than 40% from the 52-week low it hit back in April though. And shares are just 10% from their all-time highs.”

The letter also indicated that Tesla would end its residential sales agreement with Home Depot who has been selling Tesla’s solar products. Solar items will still be available in Tesla stores and online, and – according to the letter – most Tesla employees working out of Home Depot stores will have the opportunity to move to Tesla retail locations.