Tesla stock was dropping early on Thursday after a farewell message from the company’s head of product launches suggested that severe job cuts are beginning to take a toll on the electric-vehicle maker.
Rich Otto announced his resignation from Tesla on LinkedIn on Wednesday. He appeared to question the company’s direction after it said it would lay off some 14,000 people in April.
“The recent layoffs that are rocking the company and its morale have thrown this harmony out of balance and it’s hard to see the long game. It was time for a change,” Otto wrote. “There’s a lot that I’ll miss about Tesla, its people being number one.”
Otto’s role, according to his profile, has involved working with Tesla’s vehicle engineering, creative, and content teams to help launch products. He also served as the program manager for the November 2023 Cybertruck delivery event. He started at Tesla in 2017 in communications.
Tesla stock was down 1.34% in midday trading at $172.38, while the S&P 500 was up 0.3% and the Nasdaq Composite had gained 0.1%.
Layoffs have made investors nervous about growth and what losing talent can mean for the company. Musk addressed the job cuts on Tesla’s first-quarter earnings conference call, saying they were necessary to keep the company healthy after a period of rapid growth.
Tesla stock is down about 11% since the layoffs came to light.
Even before Otto’s post, Tesla was having a tough week. Reuters reported Wednesday that the Justice Department was investigating whether the company’s marketing of its driver-assistance capabilities went too far.
Tesla’s driver-assistance systems have both benefited and battered shares lately. Tesla stock rose 15% on April 29 after CEO Elon Musk won the ability to sell Tesla’s highest-level driver-assistance feature, called Full Self Driving, in China. But fears about FSD misuse and investigations drove shares lower on this past Tuesday and Wednesday.
Musk believes full self-driving technology will unlock significant value for Tesla. Regulators appear to be taking a closer look at driver-assistance technologies as they proliferate across the industry.
Coming into Thursday, Tesla stock had declined 30% this year but was still up 23% since the 52-week closing low reached on April 22. The EV maker reported better-than-feared first-quarter earnings on April 23.
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