Tesla shares dip in premarket trade after reports the firm will lay off more than 10% of global workforce

Tesla shares were down over 1% in premarket trade Monday on media reports that the automaker will lay off more than 10% of its global workforce.

The company’s stock was down 1.2% in premarket deals at roughly 7:30 a.m. ET.

“As we prepare the company for our next phase of growth, it is extremely important to look at every aspect of the company for cost reductions and increasing productivity,” Tesla CEO Elon Musk said in an internal memo cited by Reuters, which tech publication Electrek referenced in the first report of the layoffs.

“As part of this effort, we have done a thorough review of the organization and made the difficult decision to reduce our headcount by more than 10% globally,” the memo said.

CNBC was unable to independently verify the memo and has reached out for comment.

Tesla had 140,473 employees as of December 2023.

Tesla shares have taken a bruising in recent months, down 31% in the year-to-date amid waning demand for electric vehicles and stiffening competition from Chinese automakers. Foreshadowing layoffs, the company earlier this month reported its first annual decline in vehicle deliveries since 2020, when the Covid-19 pandemic disrupted production extraneous of demand — first-quarter deliveries fell by 8.5% on the year to 386,810 in the first quarter, with output down 1.7% from a year earlier and 12.5% sequentially.

Deliveries serve as an approximation of Tesla sales but are not precisely defined in the company’s shareholder communications.

Since then, the firm has also resorted to trimming the subscription price of its premium driver assistance system, the Full Self-Driving package, for U.S. customers — in a move sharply at odds with Musk’s previous pledges that the FSD fee would only bulk up as Tesla bolsters the system’s features and functionality.

This breaking news story is being updated.