Tesla is set to reduce its global workforce by over 10 percent, a decision impacting approximately 14,000 employees, as announced by CEO Elon Musk in a memo to employees recently obtained by CNBC. This move comes as part of Tesla’s broader strategy to streamline operations and enhance productivity in preparation for future growth phases.
In the memo, Musk highlighted the redundancy in roles and functions that have emerged due to Tesla’s rapid expansion and the construction of multiple global factories.
Elon Musk (Credits: NPR)
“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 explained, emphasizing the necessity of the workforce reduction despite his personal regret: “There is nothing I hate more, but it must be done.”
This decision follows a reported decline in Tesla’s vehicle deliveries for the first quarter of 2024, where the company saw an 8.5 percent decrease compared to the same period last year, delivering a total of 386,810 vehicles.
Tesla Company (Credits: Bleeping Computer)
Tesla attributed the slump to logistical challenges, including factory shutdowns due to shipping disruptions in the Red Sea and a power outage at its German factory resulting from an arson attack.
Despite this internal restructuring, Tesla also faces mounting competition from international markets, particularly from BYD, a Chinese electric vehicle manufacturer that briefly surpassed Tesla in global sales during the fourth quarter of 2023.
Tesla has since reclaimed its lead in the first quarter of this year, highlighting the ongoing rivalry in the rapidly evolving EV sector.
