Elon Musk announces he will lay off 14,000 Tesla employees, 10% of global workforce
Tesla announced this Monday that will cut more than 10% of its workforce worldwide Because of “duplication of roles and job functions in certain areas“, as can be seen from mail sent by company CEO Elon Musk to his employees. According to estimates by American media specializing in electric mobility Electrekmeans the layoff of about 14,000 employees because The workforce is approximately 140,000 people. general.
According to the statement, Musk said that “An exhaustive audit of the organization was carried out” and decided to reduce their workforce “by more than 10% globally”, which will allow them to be more “efficient, innovative and ready for the next growth phase cycle.” “As we prepare the company for its next phase of growth, it is critically important to review all aspects of the company’s operations to reduce costs and improve productivity,” Musk wrote in an email.
“I would like to thank everyone who has left Tesla for their hard work over the years. I am deeply grateful for his many contributions to our mission and wish him the best in his future opportunities. It’s very hard to say goodbye“, continued Musk’s text.
Besides, Electrek explains that it is unknown which teams will be affected by these layoffs at Tesla, but points out that on the social network two prominent company executives, Drew Baglino and Rohan Patel, no longer carry the “Tesla affiliate” badge.” which was previously shown in their profiles. Baglino is still listed as senior vice president of powertrain and energy on Tesla’s website, and Patel is Tesla’s president of policy and also served as Tesla’s “improvised public affairs arm” at X.
Poor delivery results in the first quarter
The decline in car sales in the first quarter across the company and at its height slowing demand for electric vehicles, was another of the main reasons that prompted Tesla to make this decision. The company significantly missed sales expectations at the start of this year, reporting its first quarterly decline in four years.
Some analysts cited by Bloomberg expect the electric vehicle maker’s sales could decline as the year progresses. citing slow production of its newest modelCybertruck and a pause in new product releases until the company begins production of the next-generation vehicle late next year.
Tesla will report its quarterly earnings report next Tuesday, April 23. According to the same analysts, the automobile company will still receive earnings of about 50 cents per share, compared with 85 cents per share in the first quarter of 2023. In previous quarters, Tesla recommended taking a “pause” between growth milestones, expecting sales growth to be more modest until the launch of next-generation vehicles such as the $25,000 Model 2.
The state ended last year with 140,473 employees, nearly double the number three years earlier.. The company has been ramping up production at two plants: one in Austin, US, and another outside Berlin, Germany, which began producing the Model Y in early 2022. The company began lowering prices across its entire line as these businesses achieved higher volumes.
The stock market fell by 2.7%
Tesla shares fell 2.7% on Monday after announcing workforce cuts. At 5:30 p.m., shares were trading at $166.3 per share, representing down $4.45 per title (-2.7%) after recording the maximum drop to 3.8%.
Shares of the electric vehicle maker are down 33% for 2024.ranked among the worst performers of the S&P 500 index.