Elon Musk announces layoffs at Tesla, impacting 14,000 employees
Tesla, the world's leading electric vehicle company, has confirmed plans to lay off more than 10% of its global workforce. The information was revealed in a company-wide email from CEO Elon Musk, as reported by Electrek. Musk attributed the layoffs to duplication of roles and job functions due to the company's rapid expansion. He further explained that this decision is a strategic move toward Tesla's upcoming growth phase and an effort to increase productivity.
Speculations preceded Tesla's layoff announcement
Rumors of potential layoffs at Tesla have been circulating for several months, suggesting that the company was preparing for this eventuality. Management was instructed to identify key team members, certain stock rewards were suspended, and some employees' annual reviews were canceled. Additionally, production at Gigafactory Shanghai experienced a decline. Over the weekend, rumors suggested that layoffs could reach up to 20%, with reports indicating possible reduction in Cybertruck production shifts at Gigafactory Texas.
Over 14,000 employees likely affected by Tesla layoffs
While the exact scale of the layoffs remains undisclosed, more than 10% implies that at least 14,000 employees will be impacted given Tesla's total workforce of approximately 140,000. The specific teams most affected by these layoffs are yet to be identified. However, it has been noted that two prominent Tesla executives, Drew Baglino and Rohan Patel, no longer display the "Tesla-affiliated" badge on their Twitter/X profiles.
Tesla's layoffs follow disappointing quarterly report
The layoff announcement comes after a disappointing quarterly delivery report where Tesla failed to meet delivery estimates and experienced an unusual year-on-year sales decline. The primary drop in sales is likely from China, where local EV manufacturers are rapidly expanding in both domestic and overseas markets. Despite these challenges, analysts predict that Tesla will still generate a profit of approximately $0.50 per share in its upcoming quarterly profits report on April 23, down from $0.85 a share in Q1 2023.
