- Written by Siona McCallum
- technology reporter
image source, Getty Images
Tesla will lay off more than 10% of its global electric vehicle workforce.
In a memo first reported by news site Electrek, billionaire owner Elon Musk told staff there was nothing more disgusting, “but it has to be done.” Ta.
The world's largest automaker by market value had 140,473 employees worldwide as of December, according to its latest annual report.
Tesla did not respond to the BBC's request for comment.
“We have overhauled our organization and made the difficult decision to reduce our workforce by more than 10% worldwide,” Musk's email said.
“There is nothing we hate more, but it has to be done. This allows us to be lean, innovative and greedy for the next cycle of growth. ”
Tesla employees who were told they were being made redundant told the BBC that, like all other employees, they were subsequently locked out of email.
One of the company's executives, Andrew “Drew” Baglino, said in a post on X (formerly Twitter) on Monday that he had made the “difficult decision” to leave the company after 18 years.
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Another executive, Rohan Patel, who heads public policy and business development, is also leaving.
He personally thanked Musk for the opportunity and for giving him the “authority” to lead the company's major efforts.
He also said he believes the “never-say-die attitude and hard work” of the entire Tesla team is what makes it a special place to work.
Michael Ashley Shulman, chief investment officer at Running Point Capital Advisors, said their departures “suggest that a key stage of Tesla's growth is facing serious headwinds.” He sees it as “a bigger negative signal today'' than the announcement of layoffs.
But analysts at Gartner and Hargreaves Lansdown said the cuts reflected cost pressures as the company invested in new models and artificial intelligence.
Electric vehicle (EV) manufacturers have been slow to update their aging models as high interest rates reduce consumer appetite for big-ticket items.
The company is scheduled to release its quarterly results later this month, but it has already reported a decline in vehicle deliveries in the first quarter, the first in nearly four years, and also below market expectations. Some analysts described the results as “eventful.”
Last month, Tesla cut production at its Gigafactory in Shanghai, and last week Tesla told Cybertruck employees that shifts at its Austin production line would be shortened.
Tesla is starting to feel the effects of slowing demand for electric vehicles (EVs).
Elon Musk recently denied reports that his company had backed away from plans to produce cheaper cars, which was one of his long-standing goals to create affordable EVs for the masses.
Tesla shares fell 0.8% in premarket trading Monday.
