Tesla is undertaking a sizeable reduction of its global workforce as it comes to grips with slowing demand for its electric vehicles.
The company’s chief executive officer, Elon Musk, revealed the job cuts in an email to staff, saying that it would apply to more than 10 per cent of its worldwide employee base, which would therefore equate to around more than 14,000 people.
“Over the years, we have grown rapidly with multiple factories scaling around the globe. With this rapid growth there has been duplication of roles and job functions in certain areas. 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,” said Tesla CEO Elon Musk in the memo.
“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 per cent globally.”
(Photo by Wang Gang / Costfoto/Sipa USA)
In the first quarter of this year, Tesla delivered only 386,810 vehicles. It has warned that its rate of growth this year will be “notably lower” as interest-rate hikes have made its cars more unaffordable for many, even as China continues to push forward a breadth of more accessibly-priced electric vehicles.
In Q1 2024, Tesla produced 46,561 more cars than it delivered to customers – among the largest mismatches in the company’s history.
Still, Tesla reclaimed its title from China’s BYD Co. as the world’s top seller of electric vehicles in the first quarter of this year. BYD delivered 300,114 battery-electric vehicles globally in Q1 2024,
The latest job cuts at Tesla are believed to have been implemented across the hierarchy. Senior Vice President Drew Baglino and Rohan Patel, vice president of public policy and business development have reportedly departed. Baglino, one of only four named executive officers and who was a Tesla employee for the last 18 years, resigned.
“There is nothing I hate more, but it must be done,” added Musk in his memo explaining the latest cuts. “This will enable us to be lean, innovative and hungry for the next growth phase cycle.”
This is the second major staff cut that Tesla is undertaking within the span of a few months. In mid-2022, it did away with about 10 per cent of salaried workers.
Tesla’s share price has dipped by nearly a third compared to the start of the year. It is ranked among the worst performers in the S&P 500 Index and was trading at around the U$161 mark on Monday as compared to the approximately U$250 at the start of this year.
