Elon Musk’s electric car maker Tesla has reportedly cut 14% of its workforce so far this year, hampered by growing competition from Chinese electric car companies and falling demand for its products.
As of Friday, Tesla’s internal email list reached 121,000 people, down from a global employee count of 140,473 as of Dec. 31 of last year. According to CNBC.
Comcast’s financial news channel obtained an email dated June 17th that Musk wrote to “everyone” on the Tesla payroll.
“Over the next few weeks, Tesla will be conducting a comprehensive review of how we award stock options for outstanding performance,” Musk said in an email, adding that options would be awarded to “people who have done something outstanding for the company.”
Musk, the second richest person in the world, Bloomberg Billionaires Index Rating Electric car maker Tesla Inc., whose market capitalization reached $207 billion as of Friday, told employees last Monday that it was working on implementing a stock-based compensation plan for top employees, according to two people who have reviewed the internal company memo.
The plan was announced just days after Musk received shareholder approval for a $56 billion compensation plan that includes stock options, and two months after he announced job cuts that will affect more than 10% of Tesla’s global workforce.
Earlier this month, Tesla shareholders approved a $56 billion compensation package for Musk, only for it to be struck down by a Delaware judge.
The same judge, Katherine McCormick, must now rule again on whether the pay package is legal.
The January ruling said the company’s board of directors, which includes Musk’s brother and some of his closest friends, failed to act “in the best interests of Tesla.”
Musk decided to incorporate Tesla in Texas, and the electric vehicle maker, which was previously registered in Delaware, is headquartered in Austin.
Tesla last year skipped giving performance-based stock compensation to employees, people familiar with the matter told Reuters.
Tesla’s profit margins were hit last year by aggressive price cuts aimed at recovering demand and fending off competition.
During April, Bloomberg News reported. Musk is cutting 20% of Tesla’s workforce.
In a dramatic move, Musk fired all 500 people in Tesla’s “Supercharger” division.
Tesla’s Superchargers account for more than 60% of fast-charging ports, according to federal statistics, making the company the biggest beneficiary so far of $5 billion in federal funding for new chargers.
Musk later said at X that the company still plans to expand its Supercharger network, but that it will “slow down on new locations and focus on running at 100% capacity and expanding existing locations.”
Tesla shares have fallen more than 26% since Jan. 1. In November 2021, Tesla shares topped $407, but have since fallen more than 55%, wiping out about $600 billion in market capitalization.
Tesla shares have fallen 25% since the start of 2024, and the EV maker has warned of a sharp slowdown in sales.
Tesla’s first-quarter results fell short of analysts’ expectations, but Musk said the company will launch a new, more affordable model in 2025.
With post wire
