Tesla to cut workforce by 7 percent

Tesla to cut workforce by 7 percent

Falling to about $322 per share on an abrupt move that will affect several thousand employees, Tesla stock (ticker: TSLA) showed that neither Tesla nor its fans can yet relax.

"This quarter will hopefully allow us, with great difficulty, effort and some luck, to target a tiny profit", he wrote.

Citing an email sent to employees on Friday, the Los Angeles Times said the company was offering those affected a minimum of eight weeks' pay and other benefits, including career coaching and resume assistance.The announcement came as SpaceX on Friday launched a Falcon 9 rocket from Vandenberg Air Force Base in California carrying 10 communications satellites.

The chief executive of the electric vehicle manufacturer told staff on Friday that "the road ahead is very difficult" because its products were not yet affordable for most people and it was up against a big incumbent industry.

Tesla posted a $311 million quarterly profit in October, only its third profitable quarter in eight years as a public company.

In a statement to CNBC, Wedbush analyst Dan Ives notes that Tesla's worldwide Model 3 push would likely determine the company's success in the first half of 2019.

However, starting around May, we will need to deliver at least the mid-range Model 3 variant in all markets, as we need to reach more customers who can afford our vehicles.

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Tesla does not announce how many cars it sells in China overall.

Tesla sales benefited from a $7,500 federal tax credit on electric vehicles throughout 2018, but that full credit expired at the end of 2018, and new buyers will now receive only half that amount. That incentive was reduced to $3,750 this month and it will be cut to nothing by the end of the year.

He has argued the market for electric vehicles is already established and "no longer needs the crutch of government assistance".

This is Tesla's second job cut in seven months and comes just days after it cut USA prices for all vehicles and fell short on quarterly deliveries of its mass-market Model 3 sedan.

'Tesla has only been producing cars for about a decade and we're up against massive, entrenched competitors, ' he said.

Tesla broke ground earlier this month for a factory in Shanghai, its first outside the United States. The demand for the Model 3 has increased significantly throughout the past year across all global markets and the company has been pressure to expand its production.