Tesla shares fell just over 3% on Monday, extending its year-to-date drop to 34% after the company laid off more than 10% of its workforce, or more than 14,000 employees.

Tesla CEO Elon Musk sent out a memo to employees on Sunday announcing that the EV maker would be cutting jobs due to "overlapping roles and job functions in some areas."

Two top executives left Tesla in connection with the layoffs, including Senior Vice President Drew Baglino, who led the company's engineering efforts in batteries, motors and energy products. Baglino worked at Tesla for 18 years and was often on the same stage as Musk during product announcements and co-hosted the company's earnings calls.

The other departing executive was Rohan Patel, who served as Tesla's vice president of public policy and business development.

Usually when a company announces job cuts, its stock price jumps as investors welcome the cost-saving measures and expect higher profits in the future.

However, the drop in Tesla's stock after the job cuts is causing wariness on Wall Street as investors are increasingly concerned about weakening demand for electric cars.

Earlier this month, Tesla reported first-quarter deliveries that far exceeded Wall Street forecasts and marked the company's first quarterly year-over-year sales decline since 2020.

"Inventory accumulated in Q1 and it appears that the primary reason for the decline in deliveries was lower demand for electric vehicles across regions, particularly in North America, where EV sales have been essentially flat since the summer of 2023," Bank of America said in a note last week.

For his part, Musk said in the memo that the job cuts "will allow us to be lean, innovative and ready for the next cycle of growth."

This is Tesla's first major job cut since it laid off employees at its Buffalo, N.Y., plant in February 2023.