Energy giant BP is also cutting jobs at its electric vehicle charging arm.
Reuters reports that BP has cut over a tenth of positions at its EV charging business, BP Pulse, and also withdrawn from several markets.
It is now focusing on the US, the UK, Germany and China – four countries where it sees the fastest EV growth – and pulled out of several other markets. This means around 100 jobs were axed; most staff affected have been redeployed, with just a handful leaving BP.
Over the years, we have grown rapidly with multiple factories scaling around the globe. With this rapid growth there has been duplication of roles and job functions in certain areas. As we prepare the company for our next phase of growth, it is extremely important to look at every aspect of the company for cost reductions and increasing productivity.
As part of this effort, we have done a thorough review of the organization and made the difficult decision to reduce our headcount by more than 10% globally. There is nothing I hate more, but it must be done. This will enable us to be lean, innovative and hungry for the next growth phase cycle.
Musk then thanked those who are leaving Tesla for their hard work, adding “It is very difficult to say goodbye.”
At the end of last year, Tesla had over 140,000 employees, which suggests at least 14,000 jobs are to go.
Earlier this month Tesla reported its first quarterly fall in deliveries in nearly four years, partly due to disruption at its Fremont factory in California as it tries to increase production of the updated Model 3.
Tesla is due to report its next financial results after Wall Street closes on Tuesday, April 23, covering the first three months of this year.
Newsflash: The devastating impact of the Covid-19 pandemic on the world’s poorest countries has brought poverty reduction to a halt and led to a widening income gap with nations in the rich west, the World Bank has warned.
In a report released to coincide with its half-yearly meeting, the Washington-based organisation said half of the world’s 75 poorest nations had seen income per head rise more slowly than in developed countries over the past five years.
Urging governments and the private sector to do more to help tackle what it called a “great reversal”, the Bank said that since 2019 there had been a surge in food insecurity and debt distress.
The Bank’s data showed that one in three countries eligible for grants and concessional loans under its International Development Association (IDA) arm was poorer, on average, than it was on the eve of the Covid-19 pandemic. Not since the last five years of the 20th century had more than half of the poorest countries experienced income per head grow more slowly than in developed countries.
Although oil is down this morning, it’s only dipped to its lowest level since last Wednesday.
That suggests that some, but not all, of the risk premium in the oil price has dissipated, with Brent crude down $1 per barrel at $89.50.
Raffi Boyadjian, lead investment analyst at XM, says:
It seems that the immediate market reaction to Iran’s onslaught of missiles is relief, as the attacks were well telegraphed in advance, giving the Israelis and Americans plenty of time to prepare for defensive action. Even oil futures barely flinched, spiking modestly higher at Monday’s open before pulling lower.
Elsewhere this morning, industrial production across the eurozone has crept up, but was sharply lower than a year ago.
Industrial production increased by 0.8% in the euro area in February data from Eurostat shows, compared with January.
But on an annual basis, industrial output was 6.4% lower than in February 2023 across the euro area.
This annual decline was partly due to a 3.6% drop in energy output, but was also driven by a near 9% decline in production of capital goods (heavy-duty machinery).
Oil is continuing to drop this morning, with Brent crude down 1% today at $89.52 per barrel.
Having risen last week in anticipation that Iran would respond to the bombing of its diplomatic complex in Syria two weeks ago, oil is now retreating on relief that the damage was not worse.
AJ Bell investmentdirector Russ Mould says:
The situation remains fraught and, beyond the geopolitical and humanitarian implications, a more widespread conflict in the Middle East could see energy prices surge and unpick central banks’ careful efforts to bring down inflation.
Goldman: oil prices already reflect a $5-10/bbl risk premium
Goldman Sachs analysts estimate that the oil price currently includes a risk premium of between $5 and $10 per barrel, to reflect risks to supplies from geopolitical shocks.
In a research note this morning, Goldman explain that the Brent crude price (at around $90/barrel this morning) is around $10/barrel higher than predicted by a model assuming no new disruptions to oil supply.
They say:
While the geopolitical risk premium—the compensation investors demand for the risk that geopolitical shocks reduce oil supply—is difficult to estimate, our rough estimate informed by our pricing framework and the cost of hedging would be around $5-10/bbl.
The cost of insuring against oil price spikes has picked up following attacks on Russian refineries and rising Iran-Israel tensions but has remained less elevated as of Friday than in October 2023 and in 2022 because Middle East crude production remains unaffected by the war.
Goldman add that they are focused on several potential risks:
OPEC+ may extend the existing production cuts further in a context of increased tensions between the West and several key OPEC+ countries.
The Middle East or Russia-Ukraine conflicts may damage upstream, midstream, or downstream oil infrastructure (as has happened to Russian refineries).
Iranian oil supply may decline on disruptions or under a potentially more hawkish US Administration.
While still highly unlikely, we estimate that an interruption of oil flows through the Strait of Hormuz, through which currently 17% of global oil production flows, would lead oil prices to rise 20% in the first month and eventually double if the interruption persisted for several months. Iran’s seizure of a cargo ship near the Strait of Hormuz may keep some focus on the risks to that shipping lane.