Categories Technology

Tesla forced to shut many solar facilities amidst post-layoff crunch

Tesla (TSLA) CEO Elon Musk’s ambitious clean energy initiative suffered a major setback this week when the outspoken entrepreneur was forced to call for the closure of more than a dozen of the company’s solar installation facilities in the US.

Embroiled in a series of controversies in recent months, including those triggered by missed production deadlines for the Model 3 sedan and staff layoffs, the loss-making electric car maker is seen struggling to cope with the operational and financial headwinds it is facing.

Meanwhile, the many new business ventures Tesla is rolling out back-to-back, at a time when nothing seems to be going right for the company, have left the market speculating about the future of the company.

Though Musk sounded pretty confident while terminating nearly nine percent of his employees last week, reports suggest the main reason behind the downsizing of the domestic solar business is acute staff crunch. The Palo Alto, California-based company had raised a few eyebrows when it acquired the green energy firm, SolarCity, a couple of years ago shelling out a whopping $2.6 billion.

It is learned that the downsizing would cost Tesla dearly as the process includes severing of a tie-up with retailer Home Depot (HD), which contributed a major share of the energy unit’s revenues.

Once completed, it will leave Tesla’s power division with less than 50 operational installation facilities. According to sources, the targeted facilities include those located in Arizona, Maryland, Connecticut, Texas, Delaware, New Hampshire, New Jersey, California and New York.

Reports suggest the main reason behind downsizing of the domestic solar business is acute staff crunch

What could be more damaging to Tesla’s already tainted image among employees and some investors is that the shutdown will lead to additional headcount reduction.

Meanwhile, a communique from the company said the solar energy team would be downsized in line with the previously announced workforce reduction program and vowed to scale up the staff strength in the long term to match the auto division.

Earlier this week, Tesla had sued a former staffer for allegedly stealing company secrets, after an ugly spat between Musk and the accused employee, who according to the former is a ‘saboteur.’

Now, the question is whether the management’s recent actions would help Tesla rise from the red as promised by Musk, or will the company at least bring some relief to its irate customers by meeting the production targets for Model 3.

Obviously, Tesla shareholders are not a happy lot after the recent incidents, as most of them believe Musk is experimenting with his business strategies at the cost of shareholders. The stock which lost about 10% over the past twelve months, going through several ups and downs, ended the last trading session down 4%.

Most Popular

Electronic Arts (EA) Q4 earnings drop and miss estimates; revenue down 3%

Video game company Electronic Arts, Inc. (NASDAQ: EA) reported lower earnings and revenues for the fourth quarter of 2021. Earnings also missed analysts' forecast. During the March quarter, net bookings

What lies in store for Tyson Foods (TSN) this year?

Shares of Tyson Foods Inc. (NYSE: TSN) were in green territory during afternoon hours on Tuesday. The stock has gained 32% over the past 12 months and 23% since the

Virgin Galactic (SPCE) fails to impress market amid looming uncertainty

Space tourism company Virgin Galactic Holdings, Inc. (NYSE: SPCE) ended the first quarter of 2021 without generating revenue and continued the losing streak even as uncertainty over its test flight

Tags

Add Comment
Loading...
Cancel
Viewing Highlight
Loading...
Highlight
Close
Top