Tesla job cuts heighten Wall Street concerns that EV maker faces a demand problem

Companies often experience stock price changes after announcing layoffs, but Tesla’s recent announcement resulted in a different response. Tesla shares dropped nearly 6%, reaching their lowest point since May of the previous year, after CEO Elon Musk revealed plans to reduce the global workforce by more than 10%. Tesla’s stock has been declining since the beginning of the year, with a 29% drop in Q1. The company is facing challenges such as reduced vehicle deliveries, increased competition in China, and margin erosion due to price cuts and incentives. Additionally, two Tesla executives have announced their departure. Musk emphasized the importance of cost reductions and increased productivity in a memo to employees, but some analysts and investors express concerns about demand and future growth.