Tesla Lays Off More Than 10% of its Global Workforce

In the wake of declining sales and an escalating pricing battle for electric vehicles (EVs), Tesla is going to lay off over 10% of its global workforce, as reported by Reuters. According to the New York Times, around 14,000 employees will be impacted by the layoffs, and two top executives, Rohan Patel and Drew Baglino, have already reportedly left the company.

News of the layoffs surfaced after a company-wide email was leaked and reported by Electrek, in which Tesla CEO Elon Musk said:

“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. 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 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 reported an unusual year-over-year (YoY) decline in sales of 8.5% (compared to Q1 2023) with 386,810 units in Q1 2024, missing its delivery projections. This is the first year-over-year decrease in deliveries for the corporation since the COVID-19 outbreak disrupted its operations in 2020.

While Tesla does not disclose a breakdown of deliveries by region, it is anticipated that the reduction occurred primarily in China, where Chinese EV manufacturers are gaining ground and attempting to extend their presence in export markets. Tesla has also reportedly scrapped plans for a low-cost EV, which was intended to start at under $25,000 due to severe competition from Chinese automakers that can produce EVs at much lower prices.