The slowing demand for EVs is starting to have a major effect on Tesla.
The EV giant plans to lay off more than 10 percent of its global workforce, reports Bloomberg. The cuts come less than two weeks after the company announced a sharp decline in deliveries during the first quarter of the year.
The layoffs were announced in a companywide email sent by CEO Elon Musk. The executive cited duplication of roles and the need to reduce costs as the company prepares for its next phase of growth as reasons for the cuts. The news wire reports that if the dismissals are applied companywide more than 14,000 workers could lose their jobs. Tesla, which has spent the last two years ramping up production in the U.S. and abroad, finished 2023 with 140,473 employees, which was almost double its total from 2020.
“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,” Musk wrote in the email, which was first reported by Electrek. “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 did not immediately respond to a request for comment from Robb Report on Monday morning.
The layoffs will be Tesla’s first major workforce reduction since it cut roughly 10 percent of its salaried staff in mid-2022, according to the news wire. There have been fears that more cuts could be on the way since the start of the years when managers were asked to identify which members of their teams were critical.
Tesla is also experiencing a downturn after years of rapid growth, despite the release of the long-awaited Cybertruck. Late last year, China BYD briefly pulled ahead of the company as the world’s leading EV seller. Earlier this month, the company also announced that first-quarter deliveries had fallen by 8.5 percent year-over-year. That meant the company missed Wall Street expectations by more than 16 percent. And if all that wasn’t bad enough, the company’s stock price has fallen by 31 percent this year, making it one of the worst performers in the Nasdaq 100 and S&P 500 indexes.
