Tesla will lay off 10% of its global workforce – equivalent to around 14,000 jobs – after the company suffered a fall in deliveries for the first time in almost four years.
According to Elektrek, Elon Musk, boss of the American electric vehicle manufacturer, announced the layoffs through a memo sent to company employees.
At the end of 2023, Tesla’s global workforce stood at around 140,473, meaning more than 14,000 people will lose their jobs because of the layoffs.
“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,” Musk said in the memo.
“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.”
Musk said the layoffs would allow Tesla to be “lean, innovative and hungry” for the next “growth phase cycle”, adding there would be a “difficult job” ahead.
The firm delivered around 387,000 vehicles in the first quarter of 2024 – down on market expectations by 13%.
Several factors have affected Tesla’s output. It slowed production at its Shanghai facility last month and shortened shifts for workers at its factory in Texas, which builds the long-awaited Cybertruck.
Tesla has factories around the world, in California, Texas, New York and Nevada in the US, Berlin in Germany and Shanghai, China.
It previously stated deliveries had been affected by several factors, including an arson attack on its factory in Berlin, as well as Houthi attacks on shipping in the Red Sea.
While it’s not publicly clear which departments of Tesla will be affected, Reuters reports that some members of staff based in California and Texas have been informed of their departure.
One key departure was the brand’s senior vice-president for powertrain and energy, Drew Baglino, who announced he was leaving the company after 18 years.
In addition to developing motor control firmware for the original Tesla Roadster, Baglino also designed the dual-motor system for the Tesla Model S saloon.
“I made the difficult decision to move on from Tesla after 18 years yesterday. I am so thankful to have worked with and learned from the countless incredibly talented people at Tesla over the years,” Baglino said.
“I loved tackling nearly every problem we solved as a team and feel gratified to have contributed to the mission of accelerating the transition to sustainable energy, a mission that I am quite passionate about.
Robert Johnson is a UK-based business writer specializing in finance and entrepreneurship. With an eye for market trends and a keen interest in the corporate world, he offers readers valuable insights into business developments.
