Tesla Cuts Over 10% of Global Workforce Amid Dropping Sales
Tesla is laying off over 10% of its staff, affecting at least 14,000 employees, in response to dipping sales and growing competition in the electric vehicle sector. The layoffs were revealed in an internal email (first reported by Electrek on April 14), later confirmed by CEO Elon Musk in a post on X.
In an internal email disclosed by Electrek, Tesla CEO Elon Musk emphasized that such restructuring is essential every few years to pave the way for Tesla’s future growth. He stated, “There is nothing I hate more, but it must be done.”
Musk also thanked departing employees for their contributions and highlighted the crucial role of the remaining team in Tesla’s future innovations.
According to Electrek, Tesla’s latest actions hinted at these layoffs. Recently, the company instructed managers to pinpoint essential team members and discontinued certain stock rewards. It also canceled some annual performance reviews and scaled back production at its Gigafactory in Shanghai.
The announcement also aligns with the resignations of 2 senior Tesla executives, Drew Baglino, Senior Vice President of Energy and Powertrain, and Rohan Patel, head of policy. Their departures, along with recent exits like CFO Zach Kirkhorn’s, have sparked concerns about the stability and future leadership of Tesla.
This decision comes after Tesla reported its first annual decline in vehicle deliveries since 2020, amid tough competition from Chinese EV makers and a strategic shift from mass-market vehicles to advanced projects like robotaxis. Concurrently, Tesla has also dropped plans for the affordable Model 2 car, marking a significant change in strategy.
Reuters mentioned that Musk had previously announced layoffs in 2022 due to economic worries. Tesla’s employee count still increased from roughly 100,000 at the end of 2021 to over 140,000 by the end of 2023, as per filings with U.S. regulators.
According to Electrek, Tesla’s next quarterly earnings report is scheduled for release on Tuesday, April 23. Analyst expectations suggest a profit of approximately 50 cents per share, a drop from 85 cents per share in Q1 2023.
Industry analysts suggest that Tesla’s layoffs and executive departures point to larger problems within the company. Some view these actions as essential for aligning with strategic goals, while others see them as signs of deeper growth challenges. These developments are stirring discussions among investors about Tesla’s future in a competitive and fast-changing electric vehicle market.
