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Tesla Inc. is reducing its workforce, and more than 10% of its global staff are set to be let go. This was confirmed by Elon Musk on Monday, April 15, just a day after media outlets reported about the “rumored” layoffs at the company.
Tesla currently employs about 140,000 staff worldwide, so the latest job cuts will affect around 14,000 individuals. This is almost double the total headcount recorded in the latter part of 2020, and the upcoming work reduction is undoubtedly massive.
Cause of the Layoffs
CNN Business suggested that the latest round of Tesla layoffs was caused by stiff competition and sluggish demand in the electric vehicle sector. The company recently reported a year-over-year drop in sales in the first quarter of this year, the first decline since the COVID-19 global pandemic began in 2020.
Moreover, for a short time in the fourth quarter, Tesla also lost its title as No. 1 in global EV sales to China’s BYD EV maker. Although the company’s sales are still slow, it was able to regain its EV sales title in the first quarter. Other car makers like Ford and General Motors are also struggling and have been forced to trim down their electric vehicle production.
In any case, Elon Musk sent an email to Tesla’s employees over the weekend explaining why the company decided to cut jobs. As transcribed by CNBC, part of his note reads: “Over the years, we have grown rapidly with multiple factories scaling around the globe. With this rapid growth, there has been duplication of roles and job functions in certain areas.”
The Tesla chief added, “As we prepare the company for our next phase of growth, it is extremely important to look at every aspect of the company for cost reductions and increasing productivity and as part of this effort, we have done a thorough review of the organization and made the difficult decision to reduce our headcount by more than 10% globally.”
Senior Executives to Leave
Amid the layoffs, the company’s senior vice president, Drew Bagliano, and vice president of public policy and business development, Rohan Patel, are also leaving. The former has been with Tesla for 18 years now.
Meanwhile, Patel told Tech Crunch that he decided to step down due to “overall changes,” which he did not elaborate on. Both Bagliano and Patel were said to have resigned from Tesla on the same day as the company announced the layoffs.
Photo by: SCREEN POST/Unsplash
