Tesla to lay off more than 10% of workforce, report says

Tesla is preparing to lay off more than 10% of its global workforce due to a slowdown in deliveries in the first quarter and increased competition in the electric vehicle (EV) market, according to a report.

A leaked internal email from CEO Elon Musk shows the automaker is cutting costs after years of rapid growth has led to duplication of some roles and functions in certain areas of the company. A technical publication reported that it was written that the aim was to improve productivity. Electrek reported on monday.

The world’s most valuable automaker employs approximately 140,473 people worldwide. Reuters reported. He cited Tesla’s latest annual report. The reported layoffs will affect approximately 15,000 employees.

Tesla did not immediately respond to FOX Business Digital’s request for comment.

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The layoffs come as Tesla has asked management to identify key team members, suspend some stock compensation, cancel annual reviews for some employees, and reduce production at the Gigafactory Shanghai. The announcement was made after Electrek reported that he had given instructions.

Earlier this month, it was reported that Tesla’s quarterly shipments fell for the first time in nearly four years, falling below Wall Street analysts’ expectations. Tesla said at the time that it delivered about 387,000 vehicles in the first quarter, which was well below expectations of about 443,000 and an 8.5% decrease compared to the first quarter of last year.

Tesla’s reported 10% global workforce reduction will affect approximately 15,000 employees. (The Smith Collection/Gado/Getty Images/Getty Images)

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The company also faces increasing price competition in China, a key market for EV makers, as low-cost competitors such as BYD are forced to cut prices and cut profit margins.

Tesla said it delivered 386,810 vehicles globally from January to March, 8.5% lower than the 423,000 delivered in the same period last year. (Photo by Joe Radle/Getty Images/Getty Images)

Reuters also reported earlier this month that Tesla had abandoned its long-touted plans to produce an affordable starter car called the Model 2 that was expected to start at $25,000.

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At the time, Musk accused Reuters of “lying,” but the news organization responded that it found no specific inaccuracies in its reporting.