In a shocking turn of events, Tesla CEO Elon Musk announced a significant workforce reduction of at least 10% globally less than two weeks after the company reported its first year-over-year delivery drop since 2020. The internal memo, sent late on Sunday, cited the need for cost reductions and increased productivity due to duplication of roles and job functions in certain areas.
The news of layoffs came as a surprise to many Tesla employees, with rumors circulating about potential cuts as high as 20%. While Musk confirmed that the percentage would be “more than 10%”, the exact number of employees affected was not disclosed. With Tesla employing 140,473 people globally as of December 31, at least 14,000 individuals are expected to be impacted by the layoffs.
The announcement also coincided with the departure of senior executives Drew Bagliano and Rohan Patel, who cited significant changes at Tesla as their reason for leaving. This move follows a previous round of layoffs in Buffalo, New York, earlier this year.
Despite the challenges, Musk remains optimistic about the future of Tesla, mentioning the upcoming unveiling of the Tesla Robotaxi in August. The company is scheduled to release its financial results for Q1 2024 later this month.
The news of the layoffs has sparked concerns about the company’s direction and future growth prospects, with many employees and industry analysts closely watching how Tesla navigates this challenging period.