Tesla Inc. stock plunged 6.86% during premarket trading on Friday after the earlier reports that the company is planning to lay off around 7% of its employees. Tesla traded at approximately $323 per share premarket.
The company's Chief Executive Officer Elon Musk sent a memo to his employees informing them about the cuts and saying that the main reason for the decision are cost-cutting efforts aimed at selling Tesla's Model 3 sedan at a lower price. Musk also said there are plans for Model 3 manufacturing and engineering improvements, which are crucial for the vehicle to meet current market demand.
Meanwhile, the Chinese State Administration of Market Regulation said earlier that Tesla will recall more than 14,000 S Electric Cars over a fault in the Takata airbags.