Tesla to lay off more than 10% of its staff

The reported cuts will affect about 15,000 workers

Tesla will lay off more than 10 per cent of its workforce, tech publication Electrek reported yesterday, citing an internal memo, as the top auto-maker struggles with soft demand for its electric vehicles in a highly competitive market.

Over the last few months, Tesla asked managers to identify critical team members, paused some stock rewards and canceled some employees’ annual reviews, according to the report.

4% removed in 2023

The world’s largest automaker by market value had 140,473 employees globally as of December 2023, according to its latest annual report. The reported cuts will affect about 15,000 workers.

Tesla had previously laid off 4 per cent of its workforce in New York in February last year as part of a performance review cycle and before a union campaign was to be launched by its employees.

“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,” Electrek reported, citing CEO Elon Musk’s statement in the internal memo.

Slowdown

Tesla, which is set to report its quarterly earnings on April 23, reported a decline in vehicle deliveries in the first quarter, its first in nearly four years and also below market expectations.

Meanwhile, the company has scrapped plans to produce an inexpensive car, abandoning one of Musk’s longstanding goals to make affordable EVs for the masses.

Tesla shares were down 0.3 per cent in premarket trading yesterday. After years of rapid sales growth that helped turn Tesla into the world’s most valuable automaker, the company is bracing for a slowdown in 2024.