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Reports indicate that Tesla is implementing a workforce reduction in order to improve efficiency and reduce expenses. CEO Elon Musk has reportedly communicated this decision to employees via an internal email.
In an email, the CEO of the electric automaker announced that there will be a reduction in the company’s global workforce by “more than 10%.”. With over 140,000 employees, Tesla’s recent cuts have the potential to impact more than 14,000 individuals.
The layoffs occur merely two weeks following Tesla’s announcement of its first decline in sales in three years, coinciding with a broader decrease in demand for electric vehicles. The company has cautioned investors about the possibility of sales growth being significantly lower in 2024 compared to its target of 50% annual growth. It’s currently in a transitional phase, with the Cybertruck entering production and the Model Y remaining unchanged for its fourth year.
“As we gear up the company for our next phase of expansion, it is crucial to thoroughly examine every aspect of the company to identify opportunities for cost reductions and productivity enhancements,” Musk stated in the email. According to him, Tesla’s expansion has resulted in the duplication of roles and job functions in certain areas.
As part of this endeavor, we have conducted a comprehensive evaluation of the organization and have made the challenging choice to decrease our workforce by over 10% on a global scale. There is nothing I dislike more, but it must be done. We will be able to embrace a mindset of efficiency, creativity, and ambition for the upcoming period of expansion,” Musk expressed.
In 2023, Tesla achieved an impressive milestone by shipping a record-breaking 1.8 million electric vehicles. However, the company dedicated a significant portion of the year to reducing prices on its best-selling models, aiming to offset the effects of high interest rates and intensify global competition. According to reports, the company has decided to change its plans regarding the development of a more affordable electric vehicle. Instead, they are focusing on utilizing the platform they are currently working on to create a rumored robotaxi, which is expected to be unveiled on August 8th.
