Reports emerged on Monday morning indicating that Tesla was preparing to lay off approximately 10% of its global workforce. However, more recent updates suggest that the Elon Musk-led electric vehicle giant may have already released around 15,000 employees worldwide. The information came from a company-wide email sent by CEO Elon Musk, as reported by Electrek.
Musk cited duplication of roles and job functions as the main reasons behind the layoffs, driven by Tesla’s rapid expansion. He clarified that this move is part of Tesla’s strategic plans for future growth and aims to improve productivity. Musk emphasized the importance of examining every aspect of the company for cost reductions and increased productivity as Tesla prepares for its next phase of growth, noting that the company has grown rapidly with multiple factories scaling around the globe.
This is what the e-mail says
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. 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.
I would like to thank everyone who is departing Tesla for their hard work over the years. I’m deeply grateful for your many contributions to our mission and we wish you well in your future opportunities. It is very difficult to say goodbye. For those remaining, I would like to thank you in advance for the difficult job that remains ahead. We are developing some of the most revolutionary technologies in auto, energy and artificial intelligence. As we prepare the company for the next phase of growth, your resolve will make a huge difference in getting us there.
I would like to thank everyone who is departing Tesla for their hard work over the years. I’m deeply grateful for your many contributions to our mission and we wish you well in your future opportunities. It is very difficult to say goodbye. For those remaining, I would like to thank you in advance for the difficult job that remains ahead. We are developing some of the most revolutionary technologies in auto, energy and artificial intelligence. As we prepare the company for the next phase of growth, your resolve will make a huge difference in getting us there.
Thanks,
Elon
Tesla is scheduled to release its quarterly profits report next Tuesday
Following months of speculation about Tesla’s downsizing, rumors began circulating after the company’s senior management instructed team leaders to identify key members and workers, suspend certain stock rewards, and postpone annual reviews pending further instructions.
While the exact scale and which specific teams were affected by the layoffs remain undisclosed, Elon Musk’s email, which has reportedly been leaked online, suggests that at least 10% of employees have been laid off. This indicates that at least 14,000 employees have been affected, considering Tesla’s total workforce consists of at least 140,000-150,000 people.
Interestingly, two prominent Tesla executives, Drew Baglino and Rohan Patel, no longer have the “Tesla-affiliated” badge on their X-profiles. Baglino is still listed as Senior VP of Powertrain and Energy on Tesla’s website, while Patel heads Tesla’s Policy department and has also served on Tesla’s PR team.
Although their positions remain unchanged on Tesla’s website, this development has sparked speculation about potential organizational changes within the company. Tesla is scheduled to release its quarterly profits report next Tuesday, with analysts estimating a profit of around 50 cents per share, down from 85 cents per share in the first quarter of 2023. Previous quarters have seen Tesla forecasting a “pause” between growth phases, anticipating more modest sales growth until the launch of next-generation vehicles like the rumored $25,000 Model 2. The timing of Tesla’s layoffs coincides with a trend of workforce reductions in the tech industry, despite high industry profits, suggesting a broader pattern of adjustments among companies in response to evolving market dynamics.