Tesla to lay off around 14,000 employees globally as sales decline

Tesla is laying off more than 10 per cent of its staff worldwide, reported news agency Reuters, on Monday (Apr 15) citing an internal memo. According to the report, the layoffs also come as the company grapples with a decline in sales.

‘Difficult decision’

The CEO of Tesla, Elon Musk announced “the difficult decision” in a memo, which could affect at least 14,000 jobs. In the statement, he also wrote how the company has grown rapidly in recent years and has led to duplication of roles and job functions in certain areas.

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“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,” Musk said in the memo.

He added, “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.”

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The world’s largest automaker by market value, according to its annual report, had 140,473 employees globally as of December 2023.

It is also worth noting that the company has not had a good start to the year. Tesla missed market expectations by around 13 per cent and failed to make deliveries for the first time in years citing production problems.

The issues included unforeseen factors such as attacks on shipping in the Red Sea and an arson attack on its factory in Berlin, Germany, but numbers reportedly also suggest a less global demand for electric vehicles (EVs).

“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,” Musk wrote in the memo.

‘Reorganize and streamline’

Amid media reports, the Tesla CEO also took to X and said “About every five years, we need to reorganize and streamline the company for the next phase of growth.”

Musk had announced the last round of job cuts in 2022 but never outlined how many people were fired.

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On the contrary, Reuters citing the company’s SEC filings, said the employee headcount has risen from around 100,000 in late 2021 to over 140,000 in late 2023.

On Monday, the company’s senior vice president Drew Baglino, in charge of battery development, and Rohan Patel, VP for public policy and business development, took to X and announced their exits.

Musk thanked them for their work in response to their posts.

(With inputs from agencies)