Tesla to cut workforce by more than 10%

Tesla plans to cut more than 10% of its workforce worldwide, news site Electrek reported, publishing an email from CEO Elon Musk announcing the layoffs.

The job cuts are necessary after rapid growth has led to duplication of functions, Musk said in the email to staff, according to Electrek, an online news site focused on electric vehicles (EVs).

"There's nothing I hate more, but it has to be done," Musk said. "This will allow us to be economical, innovative and hungry for the next cycle of the growth phase."

The move comes about 10 days after Tesla reported a drop in first-quarter car shipments in a report that disappointed investors.

Musk's company has also taken a series of cuts to electric vehicle prices in response to growing competition among manufacturers and slowing demand growth in some markets.

While Tesla has been active in cutting costs given its "disastrous" first-quarter deliveries and overall pressure on the business, "this is a massive cost-cutting initiative for a company that is between two waves of growth," analysts at Wedbush.

They added that "the spate of bad news over the past few months has been a horror show for investors," stressing the need to explain the cost-cutting and other issues. /BGNES