Tesla Plans To Lay off Over 10% of Its Global Workforce
Elon Musk sent an internal memo informing Tesla’s employees that the company will be laying off more than 10% of its global workforce. Discover more about Tesla’s layoffs.
- Elon Musk sent an internal memo informing Tesla’s employees that the company will be laying off more than 10% of its global workforce.
- The layoffs are part of the company’s growth and cost reduction plans.
- Read on to learn more about the layoffs.
Just when the tech industry’s layoffs seemed to be stabilizing, Tesla announced that it would lay off over 10% of its global workforce. The layoffs are part of the company’s growth and cost reduction plans.
In his internal memo to Tesla’s employees, the company’s CEO, Elon Musk, said that the company had conducted a thorough review of the organization and had decided to reduce the global headcount by over 10%, which means at least 14,000 employees.
The memo read, “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.” Electrek first reported about the memo.
In addition to the layoffs, Tesla executives Rohan Patel and Drew Baglino announced on Monday that they are quitting the company. Baglino has worked with the company since 2006, and last held the position of senior vice president for powertrain and energy engineering. Patel has worked with the company since 2016 after being a senior advisor to former US President Obama on energy and climate issues.
The layoffs seem to be in the works for a while. Over the last few months, Tesla told managers to identify critical team members. It also paused a few stock rewards and canceled a few employees’ annual reviews. Last week, there were rumors that these layoffs were about to happen. With Musk’s memo, the layoffs have been confirmed.
See more: Tech Layoffs Continue, eBay Plans To Cut 9% of Full-Time Workforce
Tesla Takes a Beating
Following the announcement, Tesla’s stock closed down by over 5% on Monday. The company’s shares have already taken a beating in recent months, falling 31% year to date.
Further, while electric vehicle (EV) sales are becoming popular worldwide, their sales growth rate has slowed, especially for Tesla. The company also faces stiff competition, majorly from Chinese EV manufacturers. At the end of 2023, Chinese manufacturer BYD briefly beat Tesla as the world’s top EV manufacturer. According to Musk himself, “There’s a lot of people who are out there who think that the top 10 car companies are going to be Tesla followed by nine Chinese car companies. I think they might not be wrong.” A few would-be Tesla customers are also skipping the brand due to Musk’s provocative rhetoric.
Earlier in April, the company reported its first annual decline in deliveries since 2020, when the COVID-19 pandemic affected production. Tesla has also warned investors to brace that EV volume growth will be notably lower this year than in 2023, saying it is currently between two major growth waves. Logistical challenges have further exacerbated the company’s problems this year.
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