It’s major news that Elon Musk, the founder and CEO of both Tesla and SpaceX, has just announced on Friday a layoff of 3,000 people of his 45,000 people combined workforce. This 7 percent job cut is planned to be used to make his Tesla Model 3 prices more affordable, which currently start at $45,000 MSRP, to a price decreased to $35,000 MSRP.
Elon Musk has also announced earlier this month the order of constructing a $2 billion Tesla gigafactory in China, which is the first ever car plant owned by a foreign country. This should result in cheaper labor for automobile manufacturer as the factory is built and run in China.
Now after hearing all this, I feel like it does not look too good for Musk’s credibility. In the start of 2019, Elon Musk announced a $2 billion factory in China and now he decides to layoff American employees in order to save money by outsourcing labor to foreign countries.
This plan may be beneficial for Tesla to grow in the long-term, but many investors feel uncertain about future of the company since the layoff as Tesla shares have dropped 13 points down by $45 to $302.26 per share after Friday’s announcement.
Tech Byte 