Tesla CEO Elon Musk sent an email to staff this week admitting that severance packages offered to some recently laid-off employees were incorrectly calculated. The email, reviewed by CNBC, states that the mistake resulted in lower-than-intended payouts for affected workers.
Layoffs Amid Ambitious Growth Plans:
The news of the severance package error comes against the backdrop of recent layoffs at Tesla (TSLA: NSD). The electric vehicle giant hasn’t revealed the exact number of positions cut, but reports suggest it could be in the hundreds. This workforce reduction is surprising to some, considering Tesla’s ambitious production goals and ongoing factory expansion projects.
Potential Reasons for Downsizing:
Possible explanations for the layoffs include streamlining operations to improve efficiency or potentially preparing for a future economic slowdown. Tesla, like many other companies, faces a volatile market environment with rising inflation and supply chain disruptions.
Bottom Line:
Investors responded pessimistly to the news, sending TSLA stock prices down in early trading hours. Tesla has not yet issued an official public statement regarding the severance package error or the layoffs.
Muzzammil is a content writer at Stock Target Advisor. He has been writing stock news and analysis at Stock Target Advisor since 2023 and has worked in the financial domain in various roles since 2020. He has previously worked on an equity research firm that analyzed companies listed on the stock markets in the U.S. and Canada and performed fundamental and qualitative analyses of management strength, business strategy, and product/services forecast as indicated by major brokers covering the stock.
