Tesla is laying off over 10% of its workforce
Amidst a decline in sales and a fierce price war in the electric vehicles market, Tesla has confirmed that it is laying off more than 10% (at least 14,000) of its 140,000-strong global workforce.
In a leaked company-wide email cited by Electrek, CEO Elon Musk stated: "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."
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"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," Musk added.
Following the news, two senior leaders, battery development chief Drew Baglino and vice president for public policy Rohan Patel, announced their departures.
The layoffs follow a lower-than-expected Q1 2024 delivery result showing 431,000 deliveries, compared to the 484,507 vehicles it sold in Q4 2023 – as well as an unusual year-over-year reduction in sales.
With companies such as Xiaomi making its foray into the EV market – with its SU7 electric car being sold $4,000 cheaper than Tesla’s Model 3 – it is expected that the prices of EVs will drop in the coming months resulting in a further decline in sales figures.