Elon Musk’s electric vehicle maker Tesla is cutting its global workforce by more than 14% since the start of 2024, leaving its total headcount, including temporary workers, at just over 121,000, according to recent internal records.
CNBC Reports Elon Musk’s electric car maker Tesla is undergoing a major restructuring, with company records showing a significant reduction in its global workforce from 2023 onwards. According to an internal email distribution list dated June 17, the company’s workforce is now about 121,000, including temporary workers. This figure represents a significant decrease of more than 14% compared to the 140,473 employees reported at the end of 2022.
The workforce cuts, which began earlier this year, were first announced in a company-wide email by CEO Elon Musk in April. Musk initially said Tesla would cut more than 10% of its workforce, but subsequent reports suggested the target could rise to 20%. Musk himself also hinted at even bigger cuts in the company’s first-quarter earnings call, citing inefficiency levels of 25% to 30% after a “long boom” that began in 2019.
There are multiple potential issues that could explain this significant layoff. Tesla is grappling with an aging lineup of electric vehicles, increasing competition in key markets like China, and declining brand power, which a recent investigation attributes in part to Musk’s “eccentric behavior” and “political rants.” These factors have contributed to slowing sales growth, with Tesla reporting a 9% decline in annualized revenue in the first quarter of 2024, the company’s largest decline since 2012.
Across the auto industry, electric vehicle sales growth has slowed this year after two years of rapid expansion, but the impact on Tesla has been particularly pronounced, even though its Model Y is set to be the world’s best-selling car through 2023.
The layoffs were not without controversy: In at least one instance, the cuts seemed excessive, leading Tesla to disband its entire Supercharging team, including its leader, Rebecca Tinucci. The company has since had to rehire some of those employees, LinkedIn posts have revealed.
Despite the cuts, Tesla is trying to maintain employee morale and incentivize performance. Musk recently announced a comprehensive overhaul to award stock options for outstanding performance and to reward people who “have done something outstanding for the company.” The move follows a moratorium on performance-based stock compensation.
Looking ahead, Tesla employees are concerned that further layoffs may come, especially in July, depending on the company’s second-quarter performance. The second-quarter production and shipments report is due out in early July, which could provide more information about the company’s current trajectory.
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Lucas Nolan is a reporter for Breitbart News covering free speech and online censorship.
