Tesla, the world’s largest automaker by market value, has announced plans to lay off more than 10% of its global workforce.
According to a report published by Reuters, the decision comes as Tesla grapples with decreasing sales and an intensifying price war in the Electric Vehicle (EV) market. This dramatic workforce reduction is part of a broader effort by the company to enhance productivity and manage costs effectively as it positions itself for future growth.
Business Insider published the internal memo sent to Tesla staff, revealing that at least part of the reduction was aimed at cutting down the “duplication of roles and job functions in certain areas.”
According to part of 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. As part of this effort, we have done a thorough review of our organization and made the difficult decision to reduce our headcount by 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 new growth phase cycle.”
As of December 2023, Tesla employed 140,473 people worldwide. The company’s shares reportedly dipped by about 3% in early trading following the announcement.
According to a report published by Reuters, the move comes shortly after Tesla cancelled plans for a $25,000 electric car, a model many analysts believed to be an important step for Tesla’s mass market expansion. Moreover, Tesla is reportedly shifting its focus towards the development of self-driving robotaxis.
These layoffs at Tesla coincide with broader trends across various sectors in the workforce, in addition to numerous well-known tech companies announcing job cuts in 2024. Some of these companies include Alphabet Group, Microsoft, Ebay, Salesforce, and Bumble.
