January 18 is turning out to be a terrible day for Tesla (TSLA) investors. At 10:21 AM EST, the stock was trading at $313.22, down 9.8% from its previous day’s closing price. These steep losses in Tesla stock today came after the company’s CEO, Elon Musk, revealed that Tesla is cutting its full-time workforce by 7%. Let’s take a look at what he had to say to departing employees.
This morning on Tesla’s official blog, Musk started his message by highlighting Tesla’s achievements in 2018. He called the year “truly remarkable and something that few thought possible just a short time ago.”
Then he moved on by discussing how Tesla needs to make its cars and other products “cost-competitive with fossil fuels,” which he believes to be “an extremely difficult challenge.” He also acknowledged intensifying competition in the electric vehicle segment.
Many other automakers including General Motors (GM), Ford (F), Fiat Chrysler (FCAU), Toyota (TM), and Honda (HMC) have accelerated their electric vehicle development programs in a last couple of years to take advantage of the rising demand in the segment.
Elon Musk to fire Tesla employees
After mentioning that Tesla is left with no choice but to cut its full-time workforce by 7%, Musk thanked fired Tesla employees. Musk wrote, “thank you for everything you have done to advance our mission. I am deeply grateful for your contributions to Tesla. We would not be where we are today without you.”
After today’s steep declines, the stock has erased all its month-to-date gains. As of Thursday’s closing, TSLA was up 4.4% month-to-date as compared to a 5.2% rise in the S&P 500 Index. By comparison, General Motors (GM), Ford (F), Fiat Chrysler (FCAU), NIO (NIO), Toyota (TM), Honda (HMC), and Ferrari (RACE) surged by 14.4%, 9.3%, 14.9%, 6.9%, 7.6%, and 11.7%, respectively, in January so far. Meanwhile, tech companies NVIDIA (NVDA), Intel (INTC), and Amazon (AMZN) have seen 13.6%, 3.3%, and 12.7% gains, respectively, while the tech giant Apple (AAPL) has gone down by 1.2% month-to-date.