【True Zoom Finance】April 16 Noon Briefing: Tesla to lay off more than 14,000 employees, even executives with 18 years of service will leave
"Tesla CEO Elon Musk stated in an internal email to employees that the company will cut more than 10% of its global workforce to reduce costs and improve productivity. Based on Tesla's global employee count, this layoff will affect over 14,000 employees. Meanwhile, CATL reported increased profits but decreased revenue in Q1 as the battery price war continues, with operating costs dropping by 16%. The tourism industry is shifting from 'rapid recovery' to 'rational prosperity.'"
Key News
Tesla to Lay Off Over 14,000 Employees, Including Senior Executive with 18 Years of Service$Tesla(TSLA.US)
l According to Xinhua News Agency, U.S. media reported on the 15th that Tesla CEO Elon Musk stated in an internal email to employees that the company will cut more than 10% of its global workforce to reduce costs and improve productivity. Based on Tesla's global employee count, this layoff will affect over 14,000 employees.
l According to Beijing Business News, a source close to Tesla confirmed to reporters that employees have indeed received the internal email announcing a global 10% workforce reduction.
l In the email, Musk stated that Tesla's "rapid growth" has led to "duplication of roles and job functions in certain areas." "To prepare for the company's next phase of growth, it is extremely important to scrutinize every aspect of the company to reduce costs and improve productivity."
l Musk said that after a thorough review, the difficult decision was made to reduce the global workforce by more than 10%. He stated that this would allow the company to remain lean, innovative, and enter the next growth cycle.
l When discussing Tesla's future, Musk mentioned that Tesla is developing some of the most revolutionary technologies in the automotive, energy, and artificial intelligence sectors. As early as February this year, rumors of layoffs at Tesla surfaced, with executives being asked to identify the "most critical roles" in their teams and delay performance reviews for some employees.
l On the morning of April 15, reports emerged that Tesla employees claimed the company would soon conduct a large-scale layoff affecting 20% of the workforce. This is not the first time Tesla has laid off employees. It is understood that in 2017, Tesla announced a 2% workforce reduction. Subsequently, Tesla also conducted layoffs in 2018, 2019, and 2022.
CATL Reports Increased Profits but Decreased Revenue in Q1 as Battery Price War Continues, Operating Costs Drop 16%
l On the evening of April 15, global new energy battery leader CATL disclosed its latest financial report. The company's Q1 revenue was 79.771 billion yuan, a year-on-year decrease of 10.41%; net profit attributable to shareholders was 10.51 billion yuan, a year-on-year increase of 7.00%, while adjusted net profit was 9.247 billion yuan, a year-on-year increase of 18.56%.
l Notably, CATL's Q1 revenue was the lowest since Q2 2022. In the previous three quarters, CATL's quarterly revenue exceeded 100 billion yuan. Meanwhile, CATL has seen a year-on-year decline in revenue for two consecutive quarters.
l From 2021 to 2022, the company's quarterly revenue maintained triple-digit year-on-year growth rates.
l Despite the decline in revenue, CATL maintained a quarterly net profit of over 10 billion yuan. Additionally, its Q1 gross margin was 26.42%, a year-on-year increase of 5.15 percentage points, reaching a ten-quarter high.
l Other financial data showed that net cash flow from operating activities was 28.358 billion yuan, a year-on-year increase of 35.25%. Basic earnings per share were 2.39 yuan, a year-on-year increase of 6.7%, while weighted average return on equity was 5.18%, a year-on-year decrease of 0.62%.
l In terms of shareholder data, as of the end of Q1 2024, CATL had 250,264 ordinary shareholders, a decrease of 10,728 from the end of 2023.
l In the investor meeting minutes released by CATL on the evening of April 15, the company stated that in Q1 2024, its global market share for power batteries steadily increased. According to global research firm SNE Research, CATL's global power battery market share reached 38.4% from January to February 2024, a year-on-year increase of 5 percentage points. Data from the China Automotive Battery Innovation Alliance showed that CATL's domestic power battery market share was 48.9% from January to March 2024, a year-on-year increase of 4 percentage points.
Tourism Industry Shifts from 'Rapid Recovery' to 'Rational Prosperity'
l Data from the Ministry of Culture and Tourism showed that domestic tourist trips reached 4.891 billion in 2023, a year-on-year increase of 93.3%; total domestic tourism spending was 4.91 trillion yuan, a year-on-year increase of 140.3%.
l At the listed company level, both resource-based tourism companies like Changbai Mountain and Huangshan Tourism, which own top-tier natural scenic spots, and OTA platforms like Ctrip and Tongcheng Travel reported revenue growth. For example, Lijiang Tourism achieved revenue of 799 million yuan in 2023, a year-on-year increase of 152.37%; net profit attributable to shareholders was approximately 227 million yuan, a staggering 59-fold increase year-on-year, marking the company's best performance since its IPO.
l "The warmth of everyday life soothes the ordinary heart." Winter tourism gained popularity among "Southern Little Potatoes" in the winter of 2023, and Changbai Mountain frequently made headlines in the capital market due to its winter sports theme. Data showed that Changbai Mountain's revenue in 2023 was 620 million yuan, a year-on-year increase of 218.73%; net profit attributable to shareholders was 138 million yuan, a year-on-year increase of 340.59%, also the company's best performance since its IPO.
l In recent years, tourism demand has gradually upgraded, with a growing emphasis on quality. Fosun Tourism Group, which focuses on high-end tourism, also delivered satisfactory results in 2023. Fosun Tourism Group Chairman Xu Xiaoliang stated that the company would actively seize opportunities arising from the recovery of urban vacations, cross-border travel, and winter tourism, while expanding into emerging source markets globally.
l OTA platforms also reported positive results. Data showed that Ctrip Group's revenue in 2023 was 44.5 billion yuan, a year-on-year increase of 122%, while net profit surged 606.91% year-on-year to 9.918 billion yuan. Tongcheng Travel's revenue in 2023 was 11.896 billion yuan, a year-on-year increase of 80.7%, with adjusted net profit reaching 2.199 billion yuan, a year-on-year increase of 240.3%. Even Tuniu, which had been reporting losses in recent years, achieved a non-GAAP net profit of 50.8 million yuan in 2023, a record high since its IPO.
l "In 2023, Tongcheng Travel's transaction volume reached 241.5 billion yuan, a record high. The number of annual paying users reached 235 million, a 54% increase compared to 2019," said Tongcheng Travel CFO Fan Lei, adding that the company's core metrics hit record highs, and operational efficiency reached new levels.
Today's Forex and Commodity News
EUR/USD: Fed's Rate Hike Expectations Increase, EUR/USD Falls Near 1.0600
l During the Asian session on Tuesday, EUR/USD fell for the sixth consecutive day, trading around 1.0610. The rise in U.S. Treasury yields pressured the pair, while stronger-than-expected U.S. retail sales data reinforced expectations that the Fed may maintain higher interest rates for longer.
l The U.S. Dollar Index (DXY) extended gains to around 106.20. As of press time, the 2-year and 10-year U.S. Treasury yields were 4.92% and 4.60%, respectively. Escalating geopolitical tensions in the Middle East drove investors toward the safe-haven U.S. dollar.
l U.S. retail sales rose 0.7% month-on-month in March, exceeding market expectations of 0.3%. The previous figure was revised upward from 0.6% to 0.9%. The retail sales control group grew 1.1%, compared to 0.3% previously.
l San Francisco Fed President Mary Daly recently stated that while significant progress has been made on inflation, more work remains. Daly emphasized the need for confidence that inflation is moving toward the target before taking action. She also noted robust economic growth, a strong labor market, and inflation currently above target levels.
l The euro weakened after ECB officials made dovish remarks on Monday. Reuters reported that ECB Governing Council member Gediminas Šimkus said the likelihood of more than three rate cuts this year exceeds 50%.
l Additionally, ECB Chief Economist Philip Lane highlighted that progress on domestic inflation has been significantly slower compared to broader inflation measures. Despite potential short-term volatility in inflation, expectations for inflation to converge toward the target by 2025 remain supported.
Precious Metals: Behind Gold's Surge: Fewer Buyers for Massive U.S. Debt Issuance$Gold(IN00380.US)
l Recently, the surge in international gold prices has captured global investors' attention. Behind the frenzy in gold buying, however, U.S. Treasuries—another safe-haven asset—have presented a starkly different, bleak scenario.
l A series of weak U.S. Treasury auctions have raised investor concerns—they increasingly worry that the market will struggle to absorb the massive debt issuance.
l Last week, after tepid demand for a $39 billion 10-year Treasury auction, the bond market sell-off intensified following higher-than-expected U.S. March CPI data. Investors also showed little interest in 3-year and 30-year Treasury auctions.
l Behind bond investors' growing caution is the belief that U.S. inflation is not yet fully under control, and the Fed will keep interest rates at multi-decade highs for months or even years. The 10-year Treasury yield, a benchmark for pricing loans from mortgages to corporate debt and dubbed the "anchor of global asset pricing," closed near 4.5% last week, close to the 5% peak reached in October last year.
l Meanwhile, the U.S. government plans to sell approximately $3.86 trillion in bonds in May—Wall Street expects massive debt issuance to continue regardless of who wins the November presidential election. While few worry about outright auction failures, many are concerned that excess Treasury supply could destabilize other U.S. markets, raise government borrowing costs, and ultimately harm the economy.
Crude Oil: Lingering Fears Over Middle East Tensions—Will Oil Prices Rise Further?
l During the Asian session on Tuesday (April 16), WTI crude oil traded narrowly, currently around $85.83 per barrel. Oil prices rebounded after an early dip on Monday, as Iran's weekend attack on Israel proved less destructive than feared, and Israel did not immediately retaliate, easing concerns that escalating conflict could disrupt oil supplies. WTI crude briefly fell to a two-week low of $84.03 per barrel but recovered as bargain hunters stepped in after Israel vowed to respond to Iran's missile and drone attacks.
l WTI crude rose 0.35% on Monday, closing at $85.63 per barrel. June Brent crude futures settled at $90.10 per barrel, down $0.35 or 0.4%. May WTI crude futures fell $0.25 or 0.3%, settling at $85.41 per barrel.
l Reports indicated that Israeli Prime Minister Benjamin Netanyahu convened a war cabinet meeting for the second time in less than 24 hours.
l Benchmark oil prices rose on Friday in anticipation of Iran's retaliatory attack, hitting their highest level since October.
l Israel intercepted Iran's attack, which involved over 300 missiles and drones, alleviating concerns about regional conflict disrupting Middle East oil shipments.
l Bob Yawger, director of energy futures at Mizuho Securities, said, "Israel's successful defense means geopolitical risks have significantly diminished."
l He added that stronger-than-expected U.S. retail sales data also weighed on oil prices, as it increased the likelihood of prolonged high interest rates reducing oil demand.
l Iran described the attack as retaliation for the airstrike on its Damascus consulate. However, the attack caused minimal damage, with some missiles intercepted by Israel's Iron Dome defense system.
l Amrita Sen, founder and research director at Energy Aspects, said, "If the crisis does not escalate to the point of disrupting supplies, downside risks will emerge over time—but only if Israel clearly opts for a cautious response."
l Rising U.S. shale oil production also pressured oil prices. The U.S. Energy Information Administration (EIA) stated that output from major U.S. shale regions would increase by over 16,000 barrels per day to 9.86 million barrels per day, the highest level in five months.
l The EIA noted that U.S. shale oil production would rise slightly in May, reaching its highest level since December 2023.
l A strengthening U.S. dollar also weighed on oil prices. U.S. March retail sales data showed growth exceeding expectations, with previous months' figures revised upward, indicating resilient consumer demand that could support strong Q1 economic growth. Financial markets and most economists have delayed expectations for the first rate cut from June to September, now anticipating two cuts this year instead of the three envisioned by policymakers.
Source: Goldhorse Capital Extramile
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