Job cuts at Tesla is not quite the bad news investors are interpreting it to be, several Wall Street analysts said on Friday.
“Reducing headcount also suggests productivity gains,” Jefferies analyst Philippe Houchois said in a note to investors. “This is, in our view, consistent with slower growth rates but mostly the scope to improve productivity and flow that we identified during our visit to the Fremont plant mid November 2018.”
CEO Elon Musk announced on Friday Tesla is cutting its full-time staff headcount by approximately 7 percent. The cut represents about 3,150 layoffs, as of the most recent Tesla staff count of 45,000 from Musk in October. Jefferies estimated the job cuts would affect between 3,200 and 3,500 people, although Houchois said the “reduction was not unexpected.”
“It’s not a huge surprise to see this,” Oppenheimer senior research analyst Colin Rusch said on CNBC’s “Squawk Box.”
“This looks to us like a mix of a proactive move in terms of cutting costs … but also a bit of cleanup on the kind of massive push to get the Model 3 out this year,” Rusch added.
Tesla fell 5.7 percent in premarket trading from Thursday’s close of $347.31 a share. Jefferies has a $450 price target on the stock.
— RECOMMENDED —
FREE PENNY STOCKS WEBINAR
How You Can Get BIG Gains from a Small Account… FAST!
Source: cnbc.com | Original Link