Tesla's revenue per employee trails behind competitors, amid layoff speculations

Recent financial reports indicate that Tesla, the leading electric vehicle (EV) manufacturer, lags behind its automotive counterparts in the amount of revenue generated per employee.

Tesla reported revenue of nearly $97 billion in the last year, translating to just under $690,000 for each of its over 140,000 employees.

This falls significantly behind General Motors (GM) and Ford Motor, which generated over $1 million and $937,000, respectively, for each of their employees in 2023.

Investors are expressing growing concerns about soft demand for EVs and heightened competition, particularly after Tesla's January warning of "notably lower" sales growth for the year.

With a heightened focus on costs, Tesla is evaluating each employee's position, fuelling speculations about potential layoffs.

The company's stock witnessed a modest gain of over 1 per cent on Thursday, but its market capitalisation has plummeted by over $180 billion in 2024, currently standing at $603 billion, just ahead of chipmaker Broadcom at $601 billion.

Tesla's gross margins, once the envy of other automakers, contracted to their lowest since 2019 in the December quarter.

During the same period, its revenue experienced a modest 3 per cent growth, reaching $25.17 billion, marking the slowest pace of growth in more than three years.

Despite trailing behind GM and Ford in revenue per worker, Tesla has shown improvement from the previous year, where it stood at $637,000.

Notably, Tesla expanded its global workforce by about 10 per cent in 2023, according to recent filings.

The broader context reveals a trend among tech-related heavyweights on Wall Street, with many laying off hundreds of thousands of workers over the past two years while continuing to grow their sales.

Meta Platforms, for instance, reported a remarkable 25 per cent surge in December-quarter revenue last week, concurrently reducing costs and expenses by 8 per cent after eliminating over 21,000 jobs since late 2022.

(With inputs from Reuters)