In a candid Monday memo to employees, Tesla CEO Elon Musk revealed plans to trim more than 10 percent of the company’s global workforce, emphasizing the need for streamlining operations amid rapid expansion.
Musk acknowledged the company’s swift growth across multiple factories worldwide, resulting in overlapping roles and functions in certain areas. As Tesla gears up for its next phase of development, Musk stressed the critical importance of scrutinizing every aspect of the company to enhance productivity and reduce costs.
The proposed cuts are expected to affect approximately 14,000 employees, given Tesla’s worldwide headcount of 140,473 as of December’s end. Despite the challenging decision, Musk emphasized its necessity for ensuring Tesla remains agile, innovative, and primed for future growth cycles.
Tesla’s first-quarter 2024 report revealed a dip in vehicle deliveries, with 386,810 vehicles delivered between January and March, marking an 8.5 percent decrease compared to the previous year. The decline was attributed, in part, to factory closures amidst shipping disruptions in the Red Sea and a power outage at a German facility following an arson attack.
Furthermore, Tesla faces heightened competition from Chinese EV manufacturer BYD, which surpassed Tesla in global sales in the fourth quarter of 2023. However, Tesla swiftly reclaimed its position in the first quarter of the subsequent year.
As Tesla recalibrates its workforce, the company remains committed to driving innovation and efficiency to navigate challenges and seize opportunities in an evolving automotive landscape.
