Reports: Tesla to lay off over 10% of global workforce
The layoffs equate to around 14,000 jobs and come following a drop in deliveries
Tesla will lay off 10% of its global workforce - equivalent to around 14,000 jobs - after the company suffered a fall in deliveries for the first time in almost four years.
According to Elektrek, Elon Musk, boss of the US electric vehicle manufacturer, announced the layoffs through a memo sent to company employees.
At the end of 2023, Tesla’s global workforce stood at around 140,473 employees, meaning over 14,000 workers will lose their jobs because of the layoffs.
“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, in the memo.
“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.”
Musk said the lay-offs would allow Tesla to be “lean, innovative and hungry for the next “growth phase cycle”, adding there would be a “difficult job” ahead. The firm delivered around 387,000 vehicles in quarter one of 2024 - down on market expectations by 13%.
Several factors have affected Tesla’s output. It slowed production at its Shanghai facility last month, and shortened shifts for workers based at its Austin factory in Texas, which is currently building the long-awaited Cybertruck.
The firm has factories across the world, including California, Texas, New York and Nevada in the US, Berlin in Germany and Shanghai, China. It previously stated deliveries had been affected by several factors including an arson attack on its factory in Berlin, as well as attacks on shipping in the Red Sea.
While it’s not publicly clear which departments of the firm will be affected, Reuters reports that some members of staff based in California and Texas have been informed of their departure.
One key departure was the brand's senior vice president for powertrain and energy Drew Baglino, who announced he was leaving the company after 18 years. In addition to developing motor control firmware for the original Tesla Roadster, Baglino also designed the dual motor system for the Tesla Model S saloon.
"I made the difficult decision to move on from Tesla after 18 years yesterday. I am so thankful to have worked with and learned from the countless incredibly talented people at Tesla over the years," Baglino said.
"I loved tackling nearly every problem we solved as a team and feel gratified to have contributed to the mission of accelerating the transition to sustainable energy, a mission that I am quite passionate about... When I joined as a junior firmware / electrical engineer back in 2006, a future Tesla that produced the world’s top-selling vehicle was well beyond my expected set of outcomes," Baglino added.
Autocar contacted Tesla about potential UK implications for the lay-offs, but the firm refused to comment.
The layoffs also come following news that Tesla would no longer pursue an entry-level ‘Model 2’ electric car, which would have sat below the Tesla Model 3 in the firm's line-up, instead focusing on autonomous robotaxis.