Tesla layoffs spark dip in Korean battery stocks

Tesla's logo in Taipei, Taiwan [REUTERS/YONHAP]

Korean battery makers closed lower on Tuesday after Tesla announced massive job cuts amid declining sales.

LG Energy Solution, the country's largest battery maker and Tesla supplier, closed at 366,000 won ($260) Tuesday, down 1.9 percent compared to the previous day.

Samsung SDI closed at 386,500 won, down 1.9 percent from the previous day.

Posco Holdings, a major battery materials company, fell 2.6 percent to close at 380,500 won, while Posco Future M closed 2.7 percent lower at 257,000 won.

LG Chem fell 3.2 percent to close at 382,000 won, and EcoPro BM fell 3.3 percent to 220,500 won.

The drop comes as multiple media outlets reported that Tesla CEO Elon Musk said in an email to its staff that the company would be laying off at least 10 percent of its workforce worldwide as part of cost-cutting measures.

"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," Musk is reported to said in the memo sent to all staff.

"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 percent globally," it said.

This will impact approximately 14,000 employees out of the 140,000 people working for Telsa as of the end of last year.

The company's shares on the Nasdaq plunged 5.6 percent to close at $161.48 on Monday.

In early March, the electric vehicle maker said it delivered a total of 386,810 units globally in the first quarter, down 8.5 percent on year, the first on-year quarterly fall in deliveries in four years.

Korea's battery exports slid accordingly, with a total volume of $1.97 billion in the first quarter, down 22.3 percent on year. The combined market share of Korean battery makers stood at 23.8 percent, down 1.2 percentage points compared to the same period last year, according to SNE Research.

Tesla is slated to announce its first-quarter earnings report on April 23.

BY SARAH CHEA [chea.sarah@joongang.co.kr]