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Saturday, 4 June 2022

Tesla To Stop Recruitment and Cut Staff Numbers

3 June 2022

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Tesla's CEO  said on 2 June that Tesla would stop the recruitment and cut staff by 10% globally.   The given reason is that the CEO was having a "bad feeling about the economy"



Whose is Tesla?

Tesla is an American automotive and clean energy company that designs and manufactures electric vehicles (electric cars and trucks), battery energy storage from home to grid-scalesolar panels and solar roof tiles, and related products and services.  It has a market capitalization of more than US$600 billion.

Tesla has electric vehicle plants in the United States, China and Berlin.  They employ around 99,290 staff worldwide, so cutting 10 per cent of staff could equate to losses approaching 10,000 people.

The Market Response

The market was taken by surprise, especially after Tesla's stock price has lost by about 80% from its peak in 2021 and has just managed to recover 22% recently.  

The CEO's announcement about staff cuts sent the "chills",  causing Tesla's stock price to fall by 9% last night. 


The announcement also threw "a spanner" into the recovering US stock market,  sending Nasdaq Index to fall about 2.5% overnight.


Many marker players were puzzling why Tesla has taken this approach and questioned if the approach was right to restore normalcy after two chaotic years of the pandemic.   Some hardcore players argued that the approach was necessary as many factories have now been fully automated.

To get the correct answer, let's find out how Tesla was doing in the sale for the past year.

The Sale 

Tesla's new vehicle sales and market share in the US (in unit) are shown in the following charts:





The 1st chart shows that Tesla's sales grew by more than 60% from 2015 to 2018.  The growth slowed down to 30% just before the pandemic in 2020 and about 3% in 2021.    The second chart shows that Tesla's market share was about 75% when it produced about 300 cars in 2018.  This market share shrank to 40% in 2019 and about 3% in 2021. 

In Conclusion

One can readily be seen that Tesla's sale has been affected not only by the pandemic but also by other factors such as competition etc,  reducing their market shares.

Reference:

1.  Tesla Inc US Total Sale  

     https://www.goodcarbadcar.net/tesla-inc-us-sales-figures/


Disclaimer:  This article is for information and educational purposes.   Readers are advised to conduct their own research and study to make their own investment decisions.



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