Elon Musk confirmed on Tuesday that the company would cut 3.5% of its workforce and said demand for electric vehicles was “very high. ” Shares soared more than 12% on the day.
Tesla shares rose as high as 12% on Tuesday before falling back to close at $711.110 a share on the day, up 9.35%. Musk has previously praised the company’s competitiveness in the electric vehicle industry in an interview while clarifying plans for layoffs.
Tesla shares hit their highest intraday price since June 9 that day. Shares of Tesla have also been hit to some extent this year as the tech sector as a whole has underperformed amid rising interest rates and heightened investor fears of a recession. As of Friday’s close, Tesla’s stock has fallen 38% this year.
“Anyone who wants to order a Tesla knows that our cars are in very high demand and the waiting list is very long,” Musk said in a video interview at the Qatar Economic Forum. “It’s not intentional … we’re doing as much as we can. Increase productivity quickly.”
Musk said this about the company’s ongoing layoffs. Tesla is laying off 10% of its salaried employees. “We’re growing very fast in payroll expenses, a bit too fast in some areas, so we need to cut back,” he said.
Musk said the layoffs would mean a reduction of about 3% to 3.5% of Tesla’s workforce, with about 66% of Tesla’s hourly workers and 33% of salaried workers earning a fixed salary. Tesla has raised the price of its electric vehicles several times this year. Tesla also raised the price of its electric vehicles in the U.S. this month as global supply chain issues persist.
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