American electric vehicle giant Tesla is laying off more than 10% of its global workforce, Reuters reports, citing an internal memo on Monday.
CEO Musk’s memo
Chief Executive Elon Musk emphasized in the internal memo that there was nothing he hated more than laying off Tesla employees, but “it must be done.”
Tesla had a total of 140,473 employees in its global electric vehicle workforce as of December 2023, as per its latest annual report.
CEO Musk’s company-wide email leaked immediately after sending it to Tesla employees. Here is the full content of the email:
| 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. 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. There is nothing I hate more, but it must be done. This will enable us to be lean, innovative and hungry for the next growth phase cycle. I would like to thank everyone who is departing Tesla for their hard work over the years. I’m deeply grateful for your many contributions to our mission and we wish you well in your future opportunities. It is very difficult to say goodbye. For those remaining, I would like to thank you in advance for the difficult job that remains ahead. We are developing some of the most revolutionary technologies in auto, energy and artificial intelligence. As we prepare the company for the next phase of growth, your resolve will make a huge difference in getting us there. Thanks, Elon |
One of the Tesla employees affected by the layoffs disclosed that he had subsequently been locked out of system access, as had all other employees on the list.
Tesla execs quit
Apart from the layoffs, two top Tesla executives are also departing the American electric vehicle giant.
Tesla’s Powertrain and Energy Engineering Senior Vice President Drew Baglino announced on X his decision to leave the company after 18 years. He indicated that the move was difficult without specifying the reason behind his resignation.
Public Policy and Business Development Vice President Rohan Patel also announced on X that he has decided to leave Tesla after eight years.
Mr. Patel took the chance to express his appreciation to the Tesla team, CEO Elon Musk, customers, and fans. He also indicated that the company’s Policy and Business Development team is among the best in the industry.
Analysts’ perspective
Gartner and Hargreaves Lansdown’s analysts think that the layoffs were a sign of cost pressures as Tesla invested in new model developments and artificial intelligence.
The Musk-led company has been really slow in revamping its aging electric vehicle lineup as increasing interest rates have strained customer preference for big-ticket items.
Tesla is also struggling with the intensifying pressure from China as the emergence of its cheaper offerings has started to invade the market. In effect, the company’s Q1 2024 deliveries recorded an 8.5% year-on-year decline. Some analysts even called the first quarter results “tumultuous.”
