Here’s why Tesla is eliminating up to 700 jobs

Here’s why Tesla is eliminating up to 700 jobs

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Tesla’s engine knocks on his head. Apart from speech games, it seems that for Elon Musk the situation is not good as Tesla has announced hundreds of layoffs. The number has not been specified, but the reports claim the number between 400 and 700 employees who would have taken off work. And among them there are workers, managers and even engineers.

The reason? According to the company, this would be the effect of the annual performance appraisal of employees. This move, besides casting a shadow on the working conditions of one of the coolest companies in the world, opens up a worrying scenario, given the enormous capitalization of Tesla as it has the ambitious goal of filling about a half million orders for Model 3.

And it is precisely this car and its production delays that have shed the clouds of a possible crisis. It is a mid-size car, of course long-range electric (at least 350 km), far from being a utility vehicle, is a premium high cost model, but still far cheaper than the iconic sedan Model S and SUV Model X.

Last year, Elon Musk’s opened orders and success was immediate: over 400,000 people paid a $1,000 check. Production has just begun but the pace is not adequate, in the past weeks it was one-tenth of the actual capacity: as 150 cars per day are produced against the 1,500 needed to meet the deadline. Now the production of the new Tesla Model 3 has increased to 250/260 units per day, but it is still a fifth of what it needs.

On Friday it was also announced that Tesla had to call back 11,000 cars of the Model X. The reason for this is a problem with the rear seat of the electric SUV, which according to the company in the workshop is to be rectified in a few minutes. Recalls have other manufacturers also, regularly and then in the range of hundreds of thousands of cars. Only from Tesla one is not accustomed to failure reports simply.

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I am a lecturer at the University of Economics in Bratislava, department of Banking and International Finance. I have a Ph.D. academic degree, my dissertation was focused on major markets. Commodities and stock markets are also the main focus of my research and publication activities.
I have approximately 10 years of investing experiences. My investments mostly focus on small- to mid-cap companies of energy sector, financial and technology.

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