Tesla is preparing for massive layoffs

The sanction was not delayed. Less than two months after reporting disappointing first-quarter sales, Tesla announced a wave of high-profile layoffs. In a letter to staff, CEO Elon Musk warned that the car company would part ways “more than 10%” Its workforce is more than 10,000 people. He justified his decision with necessity “Cut costs” dad’“Increasing productivity”, As the manufacturer faces a slowdown in demand for electric cars, as well as competition from new market entrants.

By the end of 2023, China’s BYD has overtaken Tesla in electric car sales in the last quarter. Elon Musk’s brand remained the world’s best-selling brand throughout the year, but delivery figures between January and March were Tesla’s first quarterly decline in four years. Production fell by 1.6% in one year. “We conducted a thorough review of the organization and made the difficult decision to reduce our workforce globally by more than 10%.” I hate nothing more, but it has to be done.”explained the founder in a memo to employees obtained by Bloomberg.

Tesla had more than 140,473 employees at the end of December 2023, nearly doubling its 2020 workforce, with the manufacturer eliminating duplicate positions, as suggested earlier in the year in recommendations to executives to declare redundant positions in their units. . Tesla also announced the cancellation of year-end merit bonuses for certain employees. During the latest earnings call on January 24, Vaibhav Taneja, the company’s chief financial officer, said that the management team was “Hyper Focused” on the strategy of cost rationalization and optimization.

Tesla shares fell in New York

According to the American press, the reduction of the workforce could reach almost 20% in certain departments. The distribution of layoffs was not mentioned. Tesla has factories in the United States, Europe and China. ” We have experienced rapid growth over the years, with several factories expanding worldwideElon Musk describes in his email. Because of this rapid growth, there has been a duplication of roles and functions in some areas. » Starting in early 2022, Tesla has ramped up Model Y production at its two factories in Austin, Texas, and around Berlin.