Tesla Cuts More Than 10 Percent Of Workforce
Tesla lays off more than 10 percent of staff worldwide amidst slower growth, tougher competition from China
Tesla is to lay off “more than 10 percent” of its worldwide staff, or around 14,000 people, the company’s chief executive Elon Musk said in an email to employees, citing a need for “increasing productivity”.
“There is nothing I hate more, but it must be done,” Musk said in the email.
Tesla had some 140,473 employees worldwide as of December, according to its most recent annual report.
In his email Musk said Tesla had “grown rapidly” resulting in a “duplication of roles and job functions”.
The layoffs would “enable us to be lean, innovative and hungry for the next growth phase cycle”, Musk said.
China competition
Tesla has faced growing competition in China from a number of well-funded start-ups and established manufacturers.
Those include BYD, which briefly became the world’s biggest EV maker in the fourth quarter of last year before returning the crown to Tesla in the first quarter of 2024.
Earlier in April Tesla reported its first annual decline in vehicle deliveries since Covid-19-era disruptions in 2020, saying that first-quarter deliveries fell by 8.5 percent year-on-year to 386,810, with output down 1.7 percent year-on-year and 12.5 percent from the previous quarter, in spite of incentives and discounts.
Drew Baglino, Tesla’s senior vice president of powertrain and energy since 2019, said on social media platform X, formerly Twitter, that he was making the “difficult decision” to leave the company after 18 years.
Tech layoffs
Tesla’s layoffs come amidst similar moves by tech companies over the past two years, as firms that experienced rapid growth during the pandemic have seen slower sales and more challenging economic conditions.
The EV maker’s stock price was down more than 4 percent in early trading in the US on Monday and has declined more than 30 percent so far this year.
Competitor BYD, which surpassed Tesla in deliveries of battery-powered electric vehicles in the fourth quarter of 2023, saw sales of 300,114 in the first quarter of this year, a decline of 43 percent from the previous quarter, but up 13.4 percent from the same period a year ago.
The drop meant Tesla returned to its top position for worldwide EV sales.
Tesla also remains the world’s biggest carmaker by market capitalisation, having surpassed Toyota in 2020.
