Tesla to slash more than 10% of its global workforce
Andrea Chang April 15, 2024
Tesla Inc. is laying off
more than 10% of
its workforce
by more than 10%
, Chief Executive Elon Musk wrote in an email to staff.
Musk cited job overlap and the need to reduce costs, estimating that the layoffs would affect 14,000 employees, according to the email
sent Monday
.
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 wrote in the email viewed by Bloomberg News. 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.
The reduction comes as the Austin,
Texas
-based car maker and its rivals contend with less demand for electric vehicles in a crowded field.
Although Tesla moved its headquarters from California to Texas in 2021, it still operates a massive factory in Fremont. It is one of the largest manufacturing sites in the state.
In January, Tesla reported disappointing fourth-quarter earnings, including its first year-over-year decline in quarterly deliveries in four years. Revenue and earnings per share also missed estimates.
Industry sales have slowed amid higher interest rates that have made the costly cars more expensive and have increased the challenges of expanding the market beyond the affluent first adopters who made Tesla one of the most highly valued companies in the world.
Earlier this year,
Manhattan Beach-based
Fisker In. announced it was cutting 15% of its 1,200-person workforce, halting production for six weeks and working on a deal for $150 million in new financing, dependent on forging a strategic relationship with a major auto manufacturer.
Lucid Motors, a Newark, Calif.-based maker of luxury SUVs and sedans, got a $1-billion cash infusion in March from its biggest backer, an affiliate of Saudi Arabias Public Investment Fund. In February, Apple announced it was ending development of a self-driving electric vehicle after reportedly spending more than $10 billion on the project over a decade.
On Monday morning, Drew Baglino, Tesla’s senior vice president of powertrain and energy, announced on X,
formerly Twitter,
that he was leaving the company.
“I made the difficult decision to move on from Tesla after 18 years yesterday,” he wrote. “I will always have a warm spot for the people of Tesla and Tesla products in my heart and wish the team and company the best in the future.” In a reply, Musk wrote: “Thanks for everything youve done for Tesla. Few have contributed as much as you.”
Tesla’s stock was down about 4% to $164.17 Monday morning. The company is scheduled to report first-quarter earnings
on
April 23.
