Tesla Job Cuts: Electric Carmaker Lays Off Thousands Amid Rapid Growth
Rumors had been circling of a some kind of major reduction in headcount over at Tesla for some months now. In fact, the signs leading up to the massive layoff were pretty obvious. The company had previously reduced output at its Shanghai Gigafactory, requested that managers identify key team members, canceled select employees' annual reviews, and ceased certain stock rewards.
Yesterday, Tesla formally informed staff that "more than 10%" of its global workforce is getting the axe. In the email, Tesla CEO Elon Musk said the culling stems from superfluous job roles arising from the EV maker's rapid growth.
"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," Musk said. "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. There is nothing I hate more, but it must be done. This will enable us to be lean, innovative and hungry for the next growth phase cycle."
Tesla has neither revealed which teams and departments will be affected the most by the cuts nor the exact number of employees being cut. Currently the company has around 140,000 employees, so we're taking about a sizeable 14,000 or so heads. Notably, two Tesla executives are also no longer with the company, namely Senior VP of Powertrain and Energy, Drew Baglino and Policy Chair for Tesla, Rohan Patel.
The layoff comes after a steady stream of missed targets for the company and its investors. Among others, Tesla's Q1 delivery estimates fell for the first time the four years. Even though the company is still expected to have a profitable quarter of about 50 cents per share, that's a far cry from 85 cents in Q1 of last year. Moreover, Tesla EV grip fell significantly in China, which is the largest EV market presently; brands such as BYD and Wuling continue to saturate the global market with fresh models at different price ranges, while Tesla has been slow to refresh its aging lineup.
Another big question is: Will Musk initiate more rounds of cuts in 2024?
