A few days after the report of a decline in production and deliveries in first-quarter 2019, Tesla, Inc. TSLA has announced of another round of job cut, per Bloomberg. The electric vehicle manufacturer has axed several members from sales teams in Chicago; Brooklyn, NY; and Tampa, FL.
The total number of employees dismissed has not been revealed by the company. This move is in sync with its plan of lowering staff as part of the retail retrenchment strategy adopted in February 2019. The chief executive officer of Tesla, Elon Musk outlined the strategy to shut some showrooms and switch to online-only ordering model to ramp up the production process.
Notably, in the first quarter of 2019, the company’s vehicle production and delivery numbers witnessed sequential declines of 10.9% and 31%, respectively. During the quarter, this electric automaker struggled with Model 3 deliveries to Europe and China, owing to longer transit time.
In a bid to cut costs, Tesla slashed employees, who delivered cars in the United States, and opted for store closures. In fact, in February, Elon Musk indicated that the company would evaluate all areas of sales and marketing in the following weeks. He further gave hints of job cuts and employee transition to different parts of the company.
Shares of the company have underperformed the industry it belongs to in the past three months. Over this time frame, it has lost 19.3% against the industry’s growth of 0.6%.
Zacks Rank & Stocks to Consider
Tesla currently carries a Zacks Rank #5 (Strong Sell). A few better-ranked stocks in the broader auto sector are Ferrari N.V. RACE, General Motors Company GM and Fox Factory Holding Corp. FOXF. While Ferrari and General Motors currently sport a Zacks Rank #1 (Strong Buy), Fox Factory carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Ferrari has an expected long-term growth rate of 18.5%. Shares of the company have gained 23.3% over the past three months.
General Motors’ long-term growth rate is projected at 8.9%. Over the past three months, shares of the company have gained 11.1%.
Fox Factory has an expected long-term growth rate of 15.1%. Over the past three months, shares of the company have risen 16%.
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