As part of Tesla’s massive restructuring, the electric-vehicle maker notified the California Employment Development Department this week that it’s cutting approximately 600 more employees at its manufacturing facilities and engineering offices between Fremont and Palo Alto.

The latest round of layoffs eliminated roles across the board — from entry-level positions to directors — and hit an array of departments, impacting factory workers, software developers and robotics engineers.

The cuts were reported in a Worker Adjustment and Retraining Notification, or WARN, Act filing that CNBC obtained through a public records request.

Facing both weakening demand for Tesla electric vehicles and increased competition, the company has been slashing its headcount since at least January. CEO Elon Musk told employees in a memo in April that the company would cut more than 10% of its global workforce, which totaled 140,473 employees at the end of 2023.

Previous filings revealed that Tesla would cut more than 6,300 jobs across California; Austin, Texas; and Buffalo, New York.

Musk said on Tesla’s quarterly earnings call on April 23 that the company had built up a 25% to 30% “inefficiency” over the past several years, implying the layoffs underway could impact tens of thousands more employees than the 10% number would suggest.

According to the WARN filing, the 378 job cuts in Fremont, home to Tesla’s first U.S. manufacturing plant, included people involved in staffing and running vehicle assembly. There were 65 cuts at the company’s Kato Rd. battery development center.

Tesla didn’t respond to a request for comment.

Among the highest-level roles eliminated in Fremont were an environmental health and safety director and a user experience design director.

In Palo Alto, home to the company’s engineering headquarters, 233 more employees, including two directors of technical programs, lost their jobs.

Tesla has also terminated a majority of employees involved in designing and improving apps made for customers and employees, according to two former employees directly familiar with the matter. The WARN filing shows that to be the case, with many cut from the team at Tesla’s Hanover Street location in Palo Alto.

Tesla faces reduced demand for cars it makes in Fremont, including its older Model S and X vehicles and Model 3 sedan. Total deliveries dropped in the first quarter from a year earlier, and Tesla reported its steepest year-over-year revenue decline since 2012.

An onslaught of competition, especially in China, has continued to pressure Tesla’s sales in the second quarter. Xiaomi and Nio have each launched new EV models, which undercut the price of Tesla’s most popular vehicles.

Tesla’s stock price has tumbled about 30% so far this year, while the S&P 500 is up 11%.

Musk has been trying to convince investors not to focus on vehicle sales and instead to back Tesla’s potential to finally deliver self-driving software, a robotaxi, and a “sentient” humanoid robot. Musk and Tesla have long promised customers self-driving software that would turn their existing EVs into robotaxis, but the company’s systems still require constant human supervision.

Other recent job cuts at Tesla included the team responsible for building out the Supercharger, or electric-vehicle fast-charging network, in the U.S.

Tesla disclosed plans in its annual filing for 2023 to grow and optimize its charging infrastructure “to ensure cost effectiveness and customer satisfaction.” Tesla said in the filing that it needed to expand its “network in order to ensure adequate availability to meet customer demands,” after other auto companies announced plans to adopt the North American Charging Standard.

Since cutting most of its Supercharger team, Tesla has reportedly started to rehire at least some members, a move reminiscent of the job cuts Musk made at Twitter after he bought the company and later rebranded it as X. Musk told CNBC’s David Faber last year that he wanted to rehire some of those he let go.

Read the latest WARN filing in California here

Workers at two Mercedes-Benz factories in Alabama have voted against joining the United Auto Workers, the largest autoworkers union in the U.S., a blow to an effort to strengthen the presence of organized labor in the South.

The Friday vote was seen as a bellwether for the ability of newly resurgent labor groups to successfully organize in a part of the country known for keeping union activity at bay.

The final count was 2,045 in favor and 2,642 against, according to the National Labor Relations Board.

In remarks following the vote, UAW President Shawn Fain praised the workers as ‘courageous’ but acknowledged the outcome as a ‘setback.’

‘They want justice. They lead us, they lead this fight. And that’s what this is all about,’ Fain said, adding the workers already won key concessions from Mercedes in the run-up to the vote.

‘Justice isn’t just about one vote or one campaign. It’s about getting a voice and getting your fair share,’ Fain said.

In a statement, Mercedes-Benz U.S. International Inc. said it was pleased that its workers were able to participate in a fair election.

‘We thank all Team Members who asked questions, engaged in discussions, and ultimately, made their voices heard on this important issue,’ the company said, adding: ‘We look forward to continuing to work directly with our Team Members to ensure MBUSI is not only their employer of choice, but a place they would recommend to friends and family.’

Republican officials led a vigorous campaign opposing the organizing effort. In the run-up to Friday’s vote, six Southern governors, all Republicans, led by Alabama’s Kay Ivey, warned about “special interests looking to come into our state and threaten our jobs and the values we live by.”

Alabama state lawmakers also passed a measure to deny state funding to companies that voluntarily recognize unions. The Republican speaker of the state’s House of Representatives, Nathaniel Ledbetter, has referred to the UAW as ‘a dangerous leech.’

“The forces opposing workers who want to organize a union are powerful and relentless, especially in the American South,” said Seth Harris, a law and policy professor at Northeastern University who previously served as President Joe Biden’s top labor policy adviser.

In a statement following the vote, Ivey praised the outcome.

“The workers in Vance have spoken, and they have spoken clearly!’ she said. ‘Alabama is not Michigan, and we are not the Sweet Home to the UAW.’

The UAW is also in the process of organizing a Hyundai factory in Montgomery, Ala., and recently won a union vote at a Volkswagen plant in Chattanooga. It also scored new pay raises for other workers across the South employed by Daimler Truck, after those workers threatened to strike.

“The UAW’s organizing drive among nonunion auto workers will continue, and they will have other successes building on their victory at the Volkswagen plant in Chattanooga, Tennessee, but these election results show us that it is going to be a lengthy struggle in which workers will win some battles and lose some others,” Harris said.

Organizers had accused Mercedes of underpaying its workers, and the UAW filed multiple unfair labor practice complaints with the National Labor Relations Board.

In response to an inquiry from NBC News, Mercedes declined to comment on its pay structure but said that it ‘has a proven record of competitively compensating team members and providing many additional benefits.’

It also said it had not interfered with or retaliated against any worker in their right to pursue union representation, and that it was fully cooperating with authorities. 

‘Our primary focus at MBUSI is always to provide a safe and supportive work environment for our Team Members, so they can continue to build safe and superior vehicles for the world,’ the company said.  ‘We believe open and direct communication with our Team Members is the best path forward to ensure continued success.’

Passing major milestones such as the 40,000 barrier the Dow Jones Industrial Average eclipsed this week makes for a nice headline, but market experts do not take much else from the move.

What really matters is what underpins the market, namely, whether companies are seeing sustainable profits, where monetary and fiscal policy is positioned and what the future landscape is for economic health and specifically the labor market.

Fortunately for the market, most of those variables look pretty positive these days, and are largely behind the blue-chip average’s latest landmark move.

Forty thousand “is a great milestone, but [at the] end of the day there isn’t much difference between 39,999 and 40k,” said Ryan Detrick, chief market strategist at Carson Group. “Still, this is a great reminder of how far we’ve come. Think about how many people were talking about recessions and bear markets all of last year. Now we are once again back to new highs.”

Indeed, the market stumbled through 2022, then entered 2023 with nearly all of Wall Street convinced that a looming recession would further pressure stocks.

But the “Waiting for Godot” economic retrenchment never happened, despite wobbly corporate profits and other headwinds. At the same time, fiscal help from Congress helped offset higher interest rates, while a boom in the technology sector courtesy of artificial intelligence provided wind beneath the market’s wings.

Those factors outweighed queasiness over where the Federal Reserve was headed with monetary policy amid inflation that has proved surprisingly sticky.

“Investors just got tired of being scared about all these pessimistic thoughts that were flying around during 2022 and 2023,” said market veteran Ed Yardeni, head of Yardeni Research. “The market started discounting the ‘roaring 20s’ scenario, led by productivity and artificial intelligence.”

Once investors looked through those threats, the path of least resistance for the market was higher.

The 30-stock Dow, though up fractionally Friday, has risen nearly 6% in 2024 and is up more than 19% over the past year.

However, it has vastly underperformed its major average counterparts, with the S&P 500 jumping 11% in 2024 and 27% over the past year, while the Nasdaq Composite and all its high-flying tech names have surged 11% and 33%, respectively.

That comparison took some of the luster off the Dow’s achievement, which it struggled to hold as trading continued Thursday after it first hit the 40,000 mark then into Friday.

Indeed, the Dow has more than its share of detractors.

The criticism is primarily that it only captures a small fraction of what is really happening in the market and tends to bring in new stocks only after they have hit their peak. With the surge in “Magnificent Seven” stocks, the average is even farther back than its market peers.

“People don’t focus on the Dow that much, certainly not younger investors,” said Liz Ann Sonders, chief market strategist at Charles Schwab. “I don’t know if they ever even think about the Dow. For younger investors, Nasdaq is the proxy that they think of. But all else [being] equal, round numbers boost psychology.”

Sonders, though, thinks the factors that have pushed the market higher are worth considering, citing sentiment surveys such as the American Association of Individual Investors poll indicating more than one-third of respondents are in a “neutral” mindset toward stocks with the bullish outlook diminishing, though still largely positive.

“Market participants do have a tendency to extrapolate when you’re in the glow of these huge year-over-year changes in earnings. So, there could be some risk associated with the bar being set fairly high,” Sonders said. “But right now, the economic backdrop, the combination of continued disinflation and still decent but not-hot economic growth, that’s a pretty good recipe.”

Negative sentiment actually can be a boon to markets, particularly if it results in oversold conditions.

A slump in April, when the Dow fell 5%, as markets grew skittish over a potentially hawkish Fed, helped pave the way for the most recent rally once investors grew more comfortable with higher-for-longer central bank policy along with solid economic fundamentals and a prosperous earnings season.

“It’s never where the stock market is that really matters, it’s where the market is priced from where it should be priced,” said economist and market strategist Jim Paulsen, formerly of Wells Fargo and now the author of the Paulsen Perspectives newsletter on Substack. “If we had these [economic] numbers at any point prior to the Great Recession of ’80 and ’09, we would have been heralding nirvana. Really, the fundamental story is pretty darn good.”

What retail apocalypse?

Online home goods retailer Wayfair is opening its first namesake store, near Chicago, following a string of other digitally native companies that have turned to brick-and-mortar for growth. 

In an ironic twist for a company that became a $12 billion powerhouse by persuading consumers to buy couches and beds online, Wayfair is leaning into the most basic building blocks of retail. That’s because no matter how far tech has evolved, shoppers still can’t try out a new mattress from their laptops or phones.

“If you think about the categories we’re in, they’re typically very visual categories, or very tactile, or, you know, considered purchases, because it’s reasonably expensive and you’re going to put a lot of care into picking the right item,” Wayfair CEO and co-founder Niraj Shah told CNBC.

“Depending on what purchase someone’s making, they may prefer the in-store experience and getting to work with an associate,” he said. “Or they may want to discuss financing or want design help, and we can provide all of those experiences. We provide them online as well, but sometimes, in-store can be either more pleasurable or more effective.” 

The 150,000-square-foot megastore in Wilmette, Illinois, is set to open May 23. Wayfair follows other direct-to-consumer brands that have opened stores, including Warby Parker, Figs, Casper, Glossier and Everlane.

Wayfair’s retail ambitions come as online-only companies look to plot their next phases of growth in a landscape that has evolved since their companies were founded, making it harder than ever to run a profitable e-commerce business.

Privacy changes on Meta and Apple iOS have made it more difficult for marketers to target customers in advertising campaigns. Companies also face more competition from Chinese-linked upstarts such as Shein and Temu.

Returns and the scams that come along with them are a never-ending, money-losing game. With the proliferation of online marketplaces on Amazon, Walmart and Target, just about anyone can be a retailer — and brands can find themselves competing against their own manufacturers. 

Many companies that started by selling directly to consumers now offer their wares in department stores and big-box retailers, but even that brings pitfalls. Brands that earned their competitive edge by gathering enormous amounts of data on their customers don’t have as much visibility when they’re working with wholesalers, nor do they make as much money.

They’re also subject to the whims of their partners and could be taken off the shelves with little notice or risk losing a primary revenue source if that wholesaler suddenly goes under or sees sales fall. When brands have their own stores in addition to websites, they have a lot more control over mitigating those risks.

Plus, torrid e-commerce growth during the Covid-19 pandemic has moderated and fallen to below its pre-pandemic low, U.S. Census data shows. Given the seemingly inextricable role online shopping plays in most Americans’ lives, some may be surprised to learn that the vast majority of retail sales — about 85% in 2023 — still happen offline, according to Census data. 

“For some of my companies in our various experiences, [stores] can be your very best channel from an economics perspective — if you have a really good brand,” said Larry Cheng, a founding partner at Volition Capital, a technology growth equity fund that invests in software, internet and consumer companies. “It’s not going anywhere, it’s additive to online sales, it’s additive to attracting new customers, the economics can be great.” 

Wayfair’s new location will look somewhat like an Ikea in its size and on-site restaurant, but its assortment will offer a range of diverse styles as it works to become a one-stop shop for all things home.

“You’ll see furniture, you’ll see the marketplace, which is very decor centric, but we have home improvement, which includes large appliances, kitchen cabinetry, tile, doors, hardware, you’ll also see housewares, small electric, there’ll be storage and organization,” Liza Lefkowski, Wayfair’s vice president of merchandising and stores, told CNBC. 

“You’ll see a number of categories outside of furniture, but that are very core to your home,” she said.

ng just one large-format store to complement a handful of smaller shops it opened under its specialty retail brands All Modern and Joss & Main.

In the future, Shah is envisioning a “whole portfolio of large-format stores” with a nationwide footprint. 

Wayfair’s physical store ambitions reflect a bigger wave of brick-and-mortar openings.

In the early 2010s, new store openings largely outpaced closures, until the tide turned in 2017. Nearly 8,000 retail storefronts were shuttered and only about 5,000 new ones opened that year, according to Coresight Research’s U.S. and U.K. Store Tracker Databank. 

The spike in store closures sparked headlines about the so-called retail apocalypse and warnings that stores would die off as shopping moved online. 

For a while, that seemed to be true. New store closures outpaced openings until the trend changed in 2022. For the first time in five years, more storefronts opened than closed, resulting in 1,575 net new openings. There were 307 net new openings in 2023, and there have already been 521 net new openings in 2024, as of May 10. 

Discount retailers such as Dollar General, Five Below, Burlington and TJX Companies have fueled a lot of that growth, said John Mercer, Coresight’s head of global research and managing director of data-driven research. But direct-to-consumer retailers are playing their part, as well. 

Take Warby Parker, the glasses company credited with starting the direct-to-consumer movement. In May 2023, the retailer said it believed it could open more than 900 stores in the U.S. It opened about 40 in 2023, and has 40 more planned in 2024. The new store openings contributed to a 12% jump in revenue in 2023 compared with 2022. 

Figs, which sells scrubs and other products for health-care professionals, sold its products exclusively online until it opened its first store in Los Angeles in November. It has another planned in Philadelphia for this summer. CEO Trina Spear told analysts during the company’s first-quarter earnings call May 9 that 40% of the people shopping in the Los Angeles store are new customers. 

“And this is in our most penetrated market of Los Angeles. So, that’s great to see,” Spears said. “Health-care professionals are like everybody else, right? They want to engage with brands both online and off, and we’re seeing that in our Century City store.”

Other privately held direct-to-consumer brands have also expanded into retail stores, including bedding company Brooklinen, furniture store Burrow and apparel brands Everlane and Untuckit. 

“Pure plays on [e-commerce] are saying, ‘We’re getting to a certain number, we’re doing fantastic on [e-commerce], but we won’t be able to hurdle this number no matter what … if we don’t turn on another channel,’” said Rebecca Fitts, who previously served on Warby Parker’s in-house real estate team and is now the senior vice president of business strategy at real estate advisory firm Alvarez & Marsal Property Solutions.

“I don’t think every brand is going to get to a store count of a Warby, but they’re certainly looking at those lessons, and it bodes well,” she said.

If direct-to-consumer brands could all open stores and suddenly boost sales and profitability, they’d all be doing it. But retail fundamentals can bring a steep learning curve for companies that started out as online disruptors. 

Expanding into physical retail is challenging and expensive.

Companies looking to open stores need to figure out a physical location, along with furnishings and supplies, and the logistics, such as transporting inventory, said Amish Tolia, the co-founder and CEO of Leap, a start-up that helps brands open retail stores. They also need to determine how to drive foot traffic and operate a store, he said.

All those components require “time, energy, budget and resources, right? And so for as long as we can remember, besides a multi-brand department store, if you want to go set up your own fully branded retail environment, the barriers to entry have always been incredibly high,” Tolia said.

Some direct-to-consumer brands have already been burned after they expanded too quickly and demand fell. 

Allbirds, whose market cap has gone from $4.1 billion following its initial public offering to about $114 million, rapidly opened dozens of stores over the last few years, bringing its total count to about 60, as of the end of March. But the shoe and apparel seller now plans to close 10 to 15 “underperforming” locations in the U.S. in 2024 so it can focus on “maximizing the productivity of our remaining stores,” executives said during the company’s first-quarter earnings call May 8. 

Mattress brand Purple has also opened about 60 stores, but it said during the ICR consumer investor conference in January that its showrooms are perhaps “the toughest part of our model right now” because about a third of its locations “are problematic for one reason or another.” 

“So, we’re going to slow [store openings] down a little bit in the coming year and try to figure out, how do we make sure that we get them to where they need to be so they’re profitable,” said Purple CEO Rob DeMartini. “They’re great brand beacons. But they’ve got to make some money.”

Wayfair, which hasn’t turned an annual profit since 2020, will face the same challenges as it embarks on its retail expansion. 

The company spent about $348 million on capital expenditures in 2023 but has also slashed costs to save hundreds of millions of dollars and strengthen its cash position. 

Wayfair said it’s starting slow and plans to roll out stores carefully, taking time to see what’s working and what isn’t before making future investments. 

“The challenge with it is the capital expenditure upfront,” said Cheng, from Volition Capital.

“But ultimately, all of these brands, there’s not like this one channel that is the silver bullet,” he said. “The good brands, they work across all of them.”

LAS VEGAS — The iconic Mirage hotel-casino on the Las Vegas Strip will shut its doors this summer, the end of an era for a property credited with helping transform Sin City into an ultra-luxury resort destination.

The July 17 closure will clear the way for major renovations and construction on the 80-acre (32-hectare) property, which is to reopen in 2027 as the Hard Rock Las Vegas, featuring a hotel tower in the shape of a guitar soaring nearly 700 feet (about 210 meters) above the heart of the Strip.

“We’d like to thank the Las Vegas community and team members for warmly welcoming Hard Rock after enjoying 34 years at The Mirage,” Jim Allen, chairman of Hard Rock International, said Wednesday in a statement announcing the closure.

It will be the second time this year that a Strip casino shutters. The Tropicana Las Vegas closed in April after 67 years to make room for a $1.5 billion baseball stadium planned as the future home of the relocating Oakland A’s.

Developed by former casino mogul Steve Wynn, the Mirage opened with a Polynesian theme as the Strip’s first megaresort in 1989, spurring a building boom on the famous boulevard through the 1990s.

Its volcano fountain was one of the first sidewalk attractions, predating the Venetian’s canals and the Bellagio’s dancing fountains. It was known as a venue where tourists could see Siegfried and Roy taming white tigers or a Cirque du Soleil act set to a Beatles soundtrack.

The final curtain on the Beatles-themed show, which brought Paul McCartney and Ringo Starr back together for public appearances throughout its 18-year run, also comes down in July.

Hard Rock International said Wednesday that more than 3,000 employees will be laid off and it expects to pay out $80 million in severance.

The Culinary Workers Union, which has represented about 1,700 employees at the Mirage since it opened, said in a statement that the contract it won last year ensures laid-off workers will get $2,000 for each year of service. The contract also gives them the option of being called back to work and maintaining their seniority when the hotel reopens.

“Culinary Union will continue to ensure workers are protected and centered in the property’s future,” the statement said.

The Mirage became the first Strip property to be run by a Native American tribe in 2022, after Hard Rock International, which is owned by the Seminole Tribe of Florida, purchased it from MGM Resorts in a cash deal worth nearly $1.1 billion.

Hard Rock said at the time that the property would remain open and operate under the Mirage brand for several years while it finalized renovation plans.

The Mirage is accepting no bookings for after July 14 and said any reservations past that date will be canceled and refunded.