Tesla is set to reduce its global electric vehicle workforce by more than 10%, according to a memo from billionaire owner Elon Musk, as reported by news website Electrek. Musk expressed reluctance about the decision, stating that while there is nothing he hates more, it is necessary for the company’s leaner, innovative, and growth-focused future.
As of December, Tesla had 140,473 employees worldwide, according to its latest annual report. The company has not responded immediately to the BBC’s request for comment.
The memo from Musk explained the decision as a result of a thorough organizational review, aiming to streamline operations for future growth. Employees affected by the layoffs reportedly found themselves locked out of their emails following the announcement.
Tesla’s upcoming quarterly earnings report is anticipated later this month, following a decline in vehicle deliveries in the first quarter, the first such decline in nearly four years and below market expectations. The company has experienced challenges, including reducing production at the Gigafactory in Shanghai and implementing shorter shifts for Cybertruck production in Austin.
Slowing demand for electric vehicles (EVs) has also impacted Tesla, leading to the abandonment of plans for an inexpensive car, a departure from Musk’s goal of making affordable EVs accessible to the masses. Tesla’s shares saw a 0.8% decrease in premarket trading on Monday.
The company’s sluggish response in refreshing its aging models, combined with consumer hesitance due to high interest rates, has contributed to the challenging environment. Additionally, increased competition from China, where inexpensive EVs have flooded the market, poses further pressure on Tesla.
