Mass Tesla layoffs to hit Fremont, Palo Alto
Tesla’s mass layoffs will hit the electric carmaker’s Fremont gigafactory and Palo Alto offices with 2,753 job cuts, according to state filings.
The move is part of a broader 10% workforce reduction across the Elon Musk-led company, marking one of the most substantial layoffs in the Bay Area in the past year following cuts in the thousands at Google, Meta, Cisco, PayPal and Microsoft.
The layoffs will affect 2,267 employees across a dozen Fremont locations and an additional 486 job employees across five Palo Alto sites.
Tesla told the California Employment Development Department on Monday that the layoffs will begin on June 14.
Additionally, 515 employees will be laid off across eight locations in Lathrop (San Joaquin County), where Tesla operates a battery factory. An additional 64 jobs will be lost in Burbank, according to state filings.
The company also laid off 2,688 workers in the Austin, Texas, area, where it is headquartered.
Tesla, which has eliminated its media relations department, did not respond to a request for additional comment.
On Tuesday, Tesla reported a 9% drop in revenue to $21.3 billion in the first quarter compared to a year ago, the biggest decline in more than a decade, and missed analyst expectations. Shares were up 5.5% in after-hours trading but are down more than 41% this year.
Last week, Musk announced that Tesla, facing declining stock value and increasing competition in the electric vehicle industry, would be laying off at least 10% of its global workforce to reduce costs, impacting approximately 14,000 employees based on its total 2023 head count.
“There is nothing I hate more, but it must be done,” Musk wrote in the memo.
Tesla reported an 8.5% yearover-year decline in first-quarter deliveries, marking the first drop since 2020, when the pandemic disrupted operations. A few weeks ago, the company announced its decision to abandon plans for a more cost-effective electric vehicle and instead shift its focus to the development of robotaxis.
On Wednesday, Musk also acknowledged for the first time that deliveries of Tesla’s Cybertruck have been paused due to equipment issues, leading to several customers receiving delivery cancellation notices.
“There were no injuries or accidents because of this,” Musk wrote in a post on his social media platform, X. “We are just being very cautious.”
In 2020, Musk cited the Bay Area’s high housing costs and “limit to how big you can scale” as reasons for Tesla’s headquarters move to Texas the following year.
But in 2023, the company designated Palo Alto as its second headquarters and global engineering hub, reflecting the company’s continued investment in California, despite Musk’s critical views of the state. Tesla took over offices formerly occupied by Hewlett Packard, one of the founding firms of Silicon Valley, at 1501 Page Mill Road.
The company also expanded its megafactory in Fremont, which Musk claims is the most productive car factory in North America, with more than 600,000 cars built annually. There were over 10,000 workers at the factory prior to the layoffs.
Tesla had received more than $3.2 billion in subsidies and other credits from California as of last year.
Tesla said that it had 47,000 employees in California and has spent more than $5 billion on local facilities, which also include sites in Lathrop (San Joaquin County), Hawthorne (Los Angeles County) and San Diego.
Last week, Tesla asked its shareholders to restore a record-breaking $56 billion compensation package for Musk in a proxy statement.
The request came after a Delaware court previously voided the package following a complaint from a heavy metal drummer with nine shares of Tesla stock who successfully argued that Musk unilaterally dictated the compensation terms and influenced the negotiations.
The layoffs at Tesla represent the latest job culling in what’s been a steady drumbeat of layoffs at companies nationwide, many of which have come from the tech sector.