Elon Musk recently announced in an internal memo that Tesla plans to cut over 10% of its global workforce in order to become “lean, innovative and hungry for the next growth phase.” The Tesla CEO mentioned that as the company grew rapidly, there has been duplication of roles and job functions in certain areas. The decision to lay off employees comes as Tesla is facing slower demand for its electric vehicles and its stock is down over 31% year-to-date. This marks the company’s first large-scale layoffs since February 2023, when some workers at its Buffalo, New York plant were let go.
The internal email sent by Elon Musk to Tesla employees was received close to midnight in California, according to a timestamp seen by Business Insider. Rumors of impending layoffs had been circulating among Tesla workers over the weekend, as some managers were reportedly asked to provide upper management with a list of names. In addition, Tesla had instructed managers in February to identify which roles were business-critical and had delayed performance reviews. The company denies allegations made by the Worked United union, which claimed that workers were terminated in retaliation for union activity. Tesla stated that the layoffs were due to poor performance, rather than union activity.
In the memo, Musk expressed his gratitude to the employees who will be departing Tesla, acknowledging their hard work and contributions to the company’s mission. He also thanked those who will remain for their dedication and emphasized the importance of their roles in developing revolutionary technologies in auto, energy, and artificial intelligence. Musk acknowledged the difficulty of saying goodbye to departing employees and encouraged those remaining to stay focused as the company prepares for its next phase of growth. Tesla is set to release its next earnings report on April 23, providing more insights into its financial performance amidst the layoffs.
The decision to reduce the headcount at Tesla by more than 10% globally is aimed at making the company more efficient and productive as it enters its next phase of growth. Musk highlighted the importance of cost reductions and increased productivity in preparing the company for future challenges and opportunities. The layoffs are expected to help Tesla streamline its operations and become more agile in a competitive market. While the news of job cuts may be difficult for employees, Musk expressed confidence in the remaining workforce to continue driving innovation and technological advancement at Tesla.
As Tesla faces slower demand for its electric vehicles and market challenges, the company is taking steps to restructure its workforce and optimize operations. The layoffs announced by Elon Musk in the internal memo signal a strategic shift towards creating a more focused and efficient organization. Despite the challenges posed by the job cuts, Musk remains optimistic about Tesla’s future prospects and its ability to innovate in the fields of auto, energy, and artificial intelligence. The move to reduce headcount is part of Tesla’s broader efforts to position itself for sustained growth and success in a rapidly evolving industry landscape.
