Tesla lays off more staff in software, service teams, Electrek reports
(Reuters) Electric-vehicle maker Tesla has laid off staff from the software, service and engineering departments, tech publication Electrek reported on Monday, citing sources familiar with the matter.

The move comes after the Elon Musk-led automaker disbanded its EV charging department following Tesla’s announcement last month that it was reducing its global workforce by more than 10%.

Employees at the automaker received emails over the weekend as part of broader layoffs, according to the Electrek report.

Tesla, whose shares were up more than 1%, did not immediately respond to a Reuters request for comment.

The company disclosed in notices last month that it will lay off more than 6,700 employees across its locations in Texas, California, Nevada and New York.

Tesla has been under pressure from dropping sales and an intensifying price war among automakers as elevated interest rates have slowed the adoption of electric vehicles.

The company is looking to focus on autonomous driving software, robotaxis and its humanoid robot Optimus, and Musk could be cutting its spending on certain teams to preserve cash for those projects, analysts have said.

Tesla deliveries decline for first time since 2020

Last month, shares of Tesla sank after the electric vehicle maker reported a drop in quarterly deliveries for the first time in nearly four years.

The slump in deliveries – Tesla’s closest approximation of sales – was described by some analysts as “ugly,” and it comes despite price cuts to drive up lagging demand.

Elon Musk’s EV maker said it delivered nearly 387,000 vehicles in the first three months of this year. That’s an 8.5% drop from a year ago and a 20% drop from the previous quarter.

One analyst called the results “an unmitigated disaster ... that is hard to explain away” adding: “This was a train wreck into a brick wall quarter for Musk & Co.”

Tesla attributed the drop in deliveries to its efforts to prepare its Fremont, California factory to handle increased production of the updated Model 3 and to shutdowns at its Berlin plant due to the impact of the Red Sea conflict and an arson attack.

The company has also been facing intense competition in China from local players including market leader BYD, which overtook Tesla as the largest EV maker in the fourth quarter.

But there’s another factor that could be denting Tesla’s reputation: its CEO’s often polarizing personality.

A recent survey showed that Musk’s tilt to right-wing politics and often controversial public statements are turning away some potential Tesla customers in the U.S.

Still, with a market capitalization well above the combined valuation of Toyota, Mercedes-Benz and Porsche, not all Wall Street analysts see a bumpy road ahead.

Gene Munster of Deepwater Asset Management – among those who called Tesla’s results “ugly” – nevertheless remained upbeat on the EV maker’s long-term prospects.

Writing on Musk’s social media platform X, Munster said: “I still believe Tesla is on the right track and this storm will pass.”

Shares of Tesla were on track to lose about $30 billion in market value on Tuesday.

That adds to a nearly 30% slide in value so far this year.