Tesla plans to cut more than 10% of its global workforce, CEO Elon Musk said in a memo to employees on Monday.
“Over the years, we have expanded rapidly with multiple factories around the world,” Musk said in the memo. Obtained by CNBC. “This rapid growth has led to duplication of roles and duties in certain areas.”
“As we prepare our company for the next phase of growth, it is critical that we look at all aspects of the company to reduce costs and improve productivity,” he added.
The cuts could affect about 14,000 employees, based on the electric vehicle company’s global workforce of 140,473 at the end of December.
“There is nothing worse, but it has to be done,” Musk said in a memo Monday. “This allows us to be lean, innovative and greedy for the next cycle of growth.”
Tesla reported a decline in vehicle deliveries for the first quarter of 2024. The company’s vehicle deliveries from January to March were 386,810 units, down 8.5% year-on-year.
The company said the drop in deliveries was due in part to factory shutdowns due to transportation difficulties in the Red Sea and a power outage at a factory in Germany due to an arson incident.
The company also faces increasing competition from Chinese EV maker BYD, which overtook Tesla in global sales in the fourth quarter of 2023. However, Tesla regained the title in the first quarter of this year.
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