As anticipated by industry observers, Tesla on Monday announced that it was was laying off more than 10 percent of its workforce, shedding around 14,000 jobs worldwide. CEO Elon Musk announced the cuts in a memo to the entire company, writing that they “will enable us to be lean, innovative, and hungry for the next growth phase cycle.”
Many of the layoffs appeared to take immediate effect, with employees locked out of corporate systems Monday morning. Separately, two top executives — Rohan Patel, vice president of public policy and business development, and Drew Baglino, senior vice president in charge of powertrain and energy engineering, also signaled their resignations, with Musk thanking both on X (formerly Twitter). Patel had been with Tesla for eight years, while Baglino was an 18-year veteran of the automaker, dating back to its early startup days.
The departures continue a trend of dispiriting headlines for Tesla. Between lackluster delivery numbers, increased competition in the electric vehicle market, Musk’s engagement with extremist content on X, and viral videos of brand-new Cybertrucks suffering all kinds of glitches and failures (amid reports of a problem with the truck’s accelerator pedal, customers have had their orders delayed), the company’s share price has fallen more than 35 percent in the year to date. J.P. Morgan recently cut their expectations for the company, whose next quarterly earnings call, scheduled for April 23, could yield still more bad news.
But among Tesla’s advantages, at least where it comes to valuation, is that $TSLA is a high-profile meme stock, one consistently buoyed by retail investors who love the brand, or Musk, or both. Just how dire would things have to get before these supporters sell their shares?
“Musk needs to go immediately,” wrote a user in the “investment” channel of the Discord for the subreddit r/TeslaMotors. “Clearly these executives [Patel and Baglino] are making a statement.” (The person’s username currently includes the phrase “New CEO Plz.”) A second member speculated that the two probably “got sick of being part of the endless shilling of things that are years away.” Others bemoaned the clunky rollout of Tesla’s latest offering. “Cybertruck probably needs to be canned,” said one critic, calling it “a disaster of a product” and arguing that “it’s gonna cost them more in the long run to keep going as it is.” Another user concurred that the flashy, futuristic, and polarizing vehicle was a mistake given that rival EV manufacturers are starting to threaten Tesla’s dominance, noting, “they need a fresh start, and [Cybertruck] was NOT that.”
Across social media, mockery circulated about another subreddit, r/teslasinvestorsclub, a community of more than 80,000 Tesla investors, temporarily going private. On the r/RealTesla board, which bills itself as a place for discussion of the company among “those who haven’t drank the Elon-Ade,” a redditor claimed that the group was holding a vote on whether to remain private through next week’s earning call “because of bad vibes in the comments for past few weeks.” (The board is now publicly accessible again.)
The Wall Street perspective, meanwhile, is openly bearish at the moment, with an analyst calling the layoffs an “ominous” sign for Tesla’s future and institutional investor Gary Black explaining on X why his Future Fund has continued to decrease their exposure to Tesla since late 2022.
Such warnings, however, have typically done little to dissuade Tesla’s most loyal soldiers from doubling down. “$TSLA bears and FUD lovers out today like no tomorrow,” tweeted a verified X user whose bio indicates they are “ALL IN on Tesla stock,” referring to “fear, uncertainty and doubt” around the company. The acronym is often used by bullish traders to dismiss any pessimistic read on their investment. “Usually my signal to buy more shares,” he added. Sawyer Merritt, a Tesla investor and influencer with a large following on X, published a lengthy post seeking to reframe the latest job cuts in the context of Tesla’s history. “For a company of its size, periodic adjustments to the workforce are normal, particularly during challenging economic periods and or periods of growth,” Merritt wrote, concluding, “I’m seeing a lot of people on X panic, but Tesla still has a deep bench of talent/expertise.”
Still, the fact that true believers are attempting to quell unrest means they’re feeling it. “I think that every indicator points to slowing demand,” a more skeptical investor with a decade of experience in private equity and investment management, who requested anonymity, tells Rolling Stone. “You have Chinese markets collapsing for Tesla with BYD’s Han and other competitors rolling out in the next years. All the growth prospects for Tesla are evaporating, and all the signals from within the company point to mismanagement and dire prospects,” he says.
This investor has shorted Tesla periodically over the past three years for a modest profit, he says. “I’ve had a bearish outlook on Tesla since at least 2020 as I believe their valuation as a tech company is backwards and nonsensical,” he explains. “The problem with these meme stocks is that all it takes is a big group of diehards to float the stock. That’s where we’re at now.” Yet while he’s used to pushback from peers about his appraisal of the brand, in the past few months, he’s “started to hear more and more” of them discussing “Tesla’s prospects in a negative light. Like people are wondering when the other shoe’s gonna drop.” Ultimately, he feels, “the writing is mostly on the wall when you have four straight quarters of underperformance.”
On top of what looks to be a stagnant year ahead, not everyone is hopeful for what Tesla has in the pipeline. Earlier this month, Reuters reported that the automaker was scrapping a “Model 2” sedan long in development that would have purportedly cost around $25,000, making it the company’s most affordable car and, in theory, expanding its customer base. Musk tweeted that the media outlet was “lying,” though did not specify what was incorrect in the article. The CEO has also expressed an interest in turning Tesla into a leader in AI and robotics, and to that end recently declared that Tesla would unveil a self-driving “robotaxi” in August.
Of course, Musk first promised in 2019 that Tesla would be operating robotaxis by 2020. As with his perennial missed predictions of when Tesla will achieve fully autonomous self-driving — surely a prerequisite for a drone taxi — reality has yet to catch up to the hype. These days, Musk’s guarantees of revolutionary tech just around the corner tend to occasion plenty of doubt and mockery.
The investors of Reddit’s r/wallstreetbets, for example, laughed off the very notion that Musk would have a functional robotaxi in a few months. One joked that the event will be similar to when “they unveiled the robot Optimus but actually it was a guy [in] a costume breakdancing,” alluding to a ridiculed 2021 presentation in which the concept for a humanoid Tesla robot was nothing more than a person wearing a helmet and bodysuit. Another predicted Musk would reveal “a normal Tesla driven by a dude in all black” and tell his audience to “just imagine” he wasn’t there.
On Monday, a member of r/wallstreetbets commemorated Tesla’s layoffs with a video edit of Musk posing in a dumpster on fire and floating away in floodwaters. “Thanks Memelord!” read the caption.