Tesla lays off employees in software and service divisions while restructuring

Recent reports from tech publication Electrek revealed that electric vehicle manufacturer Tesla has initiated layoffs within its software, service, and engineering departments.

This move comes in suit with the company's announcement last month of a global workforce reduction exceeding 10 per cent, which included the dissolution of its electric vehicle charging division.

Sources familiar with the matter disclosed that Tesla employees received emails over the weekend, announcing layoffs across various departments.

While Tesla's shares saw a slight increase of over 1 per cent, the company has yet to respond to requests for comments regarding the recent developments.

Last month, Tesla issued notices indicating layoffs affecting over 6,700 employees across its facilities in Texas, California, Nevada, and New York.

The electric car manufacturer faces challenges with declining sales and heightened competition in the automotive market.

An intensified price war among automakers, along with increased interest rates, has slowed the adoption of electric vehicles.

In response, Tesla is redirecting its focus towards autonomous driving software, robotaxis, and its humanoid robot project, Optimus.

Analysts speculate that the layoffs may be aimed at reallocating resources to prioritise these ventures.

Tesla's restructuring efforts include cost-saving measures, with the company anticipating expenses of over $350 million in the second quarter due to the mass layoffs.

The restructuring previously saw the departure of several top executives, including Drew Baglino, Rohan Patel, Rebecca Tinucci, and Daniel Ho.

Meanwhile, Tesla is trying to advance its product line, with plans to introduce new models utilising existing platforms and production lines to optimise capital expenditures.

(With inputs from Reuters)