Tesla reportedly will lay off more than 10% of its workforce

Tesla also joins the ranks of companies that have recently made large-scale layoffs.earliest reporter erektrek and since confirmed Reuters this Washington post and New York Times, The company is laying off “more than 10%” of its workforce; as of December 2023, it had more than 140,000 employees.Some sources also revealed Reuters Some employees have received notices indicating that layoffs have begun.

Tesla CEO Elon Musk reportedly wrote in the memo: “As we prepare for the next phase of the company’s growth, it is extremely important to look at all aspects of the company to reduce costs and increase productivity. “As part of this effort, we conducted a thorough review of the organization and made the difficult decision to reduce our global headcount by more than 10%. “

News in early February that the company asked managers which employees’ positions were essential suggested layoffs were imminent.The automaker also reportedly canceled semi-annual performance reviews for some employees Bloomberg.

Tesla has effectively doubled its workforce since 2020, with more than 140,000 employees as of 2023. Despite multiple rounds of layoffs over the years, including dozens of employees on its self-driving team a year ago, the company’s workforce has grown by about 10% in 2023 alone.

During Tesla’s quarterly earnings call in January, CEO Musk noted that the company was in between “two major growth waves.” The first is the popularity of the Model 3 and Y.However, it is expected to be realized by the end of 2025 Reuters It is suggested that Tesla may abandon this low-cost model and focus on robotaxis instead. Electrek today supports Reuters reporting, said the low-cost model was actually delayed as Tesla poured its resources into robotaxis. The website also noted that “many people” involved in the low-cost car program were also laid off as part of the layoffs. Musk said the company plans to launch the robotaxi on August 8.

Musk has warned investors that sales growth is expected to be “significantly lower” this year, which could prompt cost-cutting measures to appease them. In fact, Tesla’s sales declined in the first three months of 2024. The company is scheduled to report first-quarter 2024 earnings and sales on April 23.

Updated April 15 at 4:45 p.m. ET: This story was modified after publication to include additional details erektrek Regarding layoffs related to Tesla’s low-cost car program.