Tesla to cut jobs: it’s a ‘blessing in disguise’ for EV industry

on Jun 3, 2022
  • CEO Elon Musk says Tesla Inc will lay off 10% of its salaried workers.
  • Analyst Craig Irwin commented on the news on a CNBC interview.
  • Shares of the leading U.S. EV maker are down nearly 10% on Friday.

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Shares of Tesla Inc (NASDAQ TSLA) are down nearly 10% on Friday after CEO Elon Musk cited a “super bad feeling” about the economy as he announced the EV maker will lay off 10% of its salaried workers.

Tesla to increase its hourly headcount

Tesla had a global headcount of close to 100,000 at the end of 2021. In his email to company executives, Musk confirmed:

This does not apply to anyone actually building cars, battery packs or installing solar.

He also ordered an immediate freeze on all hiring and said the leading U.S. electric cars manufacturer will rely more on hourly workers from here on. The stock is down more than 40% for the year.

Roth Capital analyst comments on the news

According to Craig Irwin – senior research analyst at Roth Capital – the announcement does not stem from a slowdown in the demand for Tesla vehicles. On CNBC’s “Squawk on the Street”, he said:

Tesla Inc is a very well-run company. For them to focus on taking out cost now is not a surprise. Longer-term demand, I don’t think really is all that changed. Electric vehicles are inevitable.

Irwin is convinced that close to 10,000 Tesla employees finding a place in other EV companies will be a “blessing in disguise” for the industry at large. According to Crispus Nyaga; financial analyst at Invezz, Tesla stock price could tank further to $500 a share.