Tesla has cut more than 10% of its global workforce. CEO Elon Musk called the move a “difficult decision” for the company, which is grappling with declining sales as electric vehicle price competition intensifies.
The layoffs, announced Monday in an internal memo to Tesla’s roughly 140,000 employees worldwide, could reach as much as 20% in some departments, two people familiar with the matter told Bloomberg. told.
“As we prepare the company for its next phase of growth, it is critical that we look at all aspects of the company to reduce costs and improve productivity,” Tesla CEO Elon Musk said in a statement. said.
“As part of this effort, we have overhauled our organization and made the difficult decision to reduce our workforce by more than 10% globally,” he added in the note. This story was first reported by a technology magazine. Electrek.
Monday’s layoffs were effective immediately, according to a copy of an email sent to fired employees obtained by Reuters.
In response to comments about Musk-owned X, the mogul posted that “approximately every five years, we need to restructure and streamline our company for the next phase of growth.”
Also on Monday, Tesla announced that Drew Baglino, Tesla’s senior vice president of battery development, and Rohan Patel, Tesla’s vice president of public policy and business development, are leaving the company at X.
Mr. Baglino was one of four members of Tesla’s executive team, including Mr. Musk, listed on the company’s investor relations website.
Musk thanked both executives for their work in response to their respective memos on X.
Representatives for Tesla did not immediately respond to The Post’s request for comment.
Tesla shares closed down more than 5% and have fallen nearly 35% since the beginning of the year.
Scott Acecheck, CEO of Rex Shares, which manages an ETF with high exposure to Tesla stocks, said the job cuts were strategic and said Tesla’s overall year-over-year headcount increase was attributable to the automaker. He pointed out that this is a sign that the company is still in its growth stage.
Still, Michael Ashley Shulman, chief investment officer at Running Point Capital Advisors, said the senior executive departures are “a larger negative signal today” that Tesla is having trouble growing. I considered it.
Musk last announced a series of layoffs. in 2022“I have a very bad feeling” about the economy, he told executives. Tesla has not disclosed how many jobs it will cut in 2022.
The job cuts come less than two weeks after the company posted its first year-over-year decline in quarterly car deliveries since 2020.
Tesla reported earlier this month that it delivered 386,810 vehicles globally in the first three months of 2024, down more than 9% from 422,875 vehicle sales in the first quarter of last year. . The figure was well below Wall Street’s estimate of 457,000.
The Austin, Texas-based company produced more than 433,000 vehicles for delivery in the first quarter, which means about 12% of its inventory remained unsold.
Despite the shortfall, this result was enough for Tesla to take back the world’s top EV sales position from BYD.
Tesla lost the title to BYD late last year, when the Chinese EV rival was touted to offer mass-produced models far cheaper than Tesla’s price for China’s cheapest Model 3 sedan. .
The Warren Buffett-backed automaker, which stands for “Build Your Dreams,” sold 300,114 fully electric vehicles worldwide in the first three months of this year, compared to the same period in 2023. It increased by 13%.
Elsewhere in China, which is accelerating in the race for global auto supremacy, Japanese automaker Nissan Motor Co. has announced plans for 30 new cars, 16 of which will be fully electric. .
The company announced this month that seven of its upcoming new models will be exclusive to the U.S. and Canada, but it wasn’t immediately clear how many of them would be fully electric.
Nissan also hinted in a press release that “e-POWER and plug-in hybrid models” that use a mix of electricity and fuel will be introduced in the Americas.
Meanwhile, Tesla has been slow to update its aging models and even announced this month that it would halt the rollout of low-cost cars that investors had hoped would fuel mass-market growth.
Tesla is scheduled to report its full financial report for the first quarter of 2024 on April 23, but it is bracing for a slowdown in 2024 after years of rapid sales growth.
In Q4 2023, Tesla posted a gross profit margin of 17.6%. This is his lowest level here in over four years.
The company is now looking to shore up profits despite its second layoff in just over a year.
Tesla laid off 4% of its workforce in New York in February last year as part of a performance review cycle and before employees began a union campaign.
with post wire
