Tesla, the renowned electric vehicle (EV) manufacturer, is gearing up to reduce its global workforce by more than 10%, as reported recently. The decision comes in the wake of sluggish first-quarter deliveries and heightened competition within the EV sector.
An internal memo leaked from CEO Elon Musk outlined the company’s intention to streamline operations and boost efficiency, citing years of rapid expansion that have led to redundancies in certain job roles and functions, according to a report by tech publication Electrek.
With approximately 140,473 employees worldwide, as indicated in Tesla’s latest annual report cited by Reuters, the anticipated downsizing is expected to impact around 15,000 workers.
Tesla has refrained from immediate comments on inquiries made by FOX Business Digital regarding the reported layoffs.
This development follows revelations from Electrek suggesting that Tesla instructed managers to identify essential team members, temporarily halted some stock incentives, suspended certain annual reviews, and scaled back production at Gigafactory Shanghai.
Earlier this month, Tesla’s quarterly deliveries experienced their first decline in nearly four years, falling short of Wall Street projections. The company disclosed delivering approximately 387,000 vehicles in the first quarter, a figure notably lower than the anticipated 443,000 and representing an 8.5% drop compared to the same period last year.
Furthermore, Tesla has encountered intensified competition in China, a pivotal market, where rivals like BYD have initiated a price war, compelling Tesla to reduce prices and impact its profit margins.
Reuters also reported that Tesla had abandoned its long-advertised plans to develop a budget-friendly entry-level vehicle, purportedly named the Model 2, with an anticipated starting price of $25,000.
In response, Musk dismissed Reuters’ claims as “lying,” although the publication maintained that no specific inaccuracies were identified in its reporting.
