Tesla Slashes the Bonus of Chinese Workers as Barclays Cuts the EV Giant’s Stock Price Target
This is not investment advice. The author has no position in any of the stocks mentioned. Wccftech.com has a disclosure and ethics policy.
It was only a matter of time when Tesla's scorched earth policy of employing aggressive price cuts to stimulate waning demand would have started producing unintended consequences.
Recently, we got out first glimpse at one such consequence when Tesla's workers at its Shanghai Gigafactory started flooding the social media airwaves with personal appeals to Elon Musk following a facility-wide intimation over the weekend of cuts to performance bonuses.
Some workers believe that they are being unfairly punished for a fatal accident that occured at Giga Shanghai's welding workshop in February, resulting in the unfortunate loss of life of a worker. The ensuing government investigation revealed safety lapses that had directly contributed to the incident.
$TSLA cuts bonuses at its Shanghai factory. Total red flag for Q1 earnings this Wednesday if it's retroactive.
Or a sign that $TSLA is already looking at how to trim costs amid sagging Chinese auto demand & a massive price war. https://t.co/EwHHs0JoJg
— Motorhead (@BradMunchen) April 17, 2023
Nonetheless, the fact remains that Tesla will be able to incur some cost savings on the back of it's bonus curtailment. As per a number of online posts, the quarterly performance bonuses have been slashes by around 2,000 Yuan or $292. When averaged over the 20,000 workers at Giga Shanghai, the savings compute at around $5.8 million.
If, however, this bonus curtailment is retroactive in nature, it would strengthen the thesis around Tesla's rapidly weakening financials.
They might just reduce the headcount instead, no? My understanding is the total comp with
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