Shares of electric-vehicle (EV) maker Tesla (TSLA 1.72%) were up several percentage points on Friday. The stock rose as much as 3.7% before settling to a 2.5% gain as of 2:40 p.m. ET.
The growth stock was likely up due to a combination of an upbeat day in the overall market and news that the EV company is continuing to lay off employees.
Highlighting the upbeat market on Friday, the S&P 500 was up nearly 1% at the time of this writing as the index attempts to recover from a brutal sell-off that worsened on Thursday. The tech-heavy Nasdaq Composite was up more than 2% at the same time.
Tesla’s reported layoffs could also be encouraging investors. Layoffs have included both salaried employees and hourly employees across the company’s sales and delivery teams, according to Electrek; the EV news website cited sources “familiar with the matter.”
While layoffs may sound like bad news for Tesla on the surface, a case can be made as to why the company might not need as many sales employees right now. It has a backlog of demand because orders are exceeding supply. Additionally, the company has done layoffs successfully before; when companies grow fast, it sometimes makes sense for an intentional effort to make the organization more lean.
Investors will hear from Tesla in a few weeks when the company reports deliveries for its second quarter. They could fall sequentially because of continued supply chain issues and restrictions around operations in Shanghai due to COVID-19 that hurt production at the company’s factory in China. Nevertheless, Tesla has thus far maintained its outlook to grow production about 50% or more this year.
Tesla typically releases its quarterly delivery figures a few days after each quarter ends. So investors should ideally find out the company’s second-quarter deliveries no later than July 3.