Tesla is laying off “more than 10%” of its workforce worldwide

Tesla announced the layoffs of “more than 10%” of its global workforce in an internal company-wide email.

Over the past few months, it looked like Tesla might be gearing up for a round of layoffs. Tesla has asked managers to identify critical team members, and has paused some stock bonuses while canceling annual reviews for some employees. It also reduced production at Gigafactory Shanghai.

Then, over the weekend, we heard rumors that these layoffs were about to happen, which came to us from multiple independent sources, as we reported yesterday. Rumors indicated that the layoff rate could reach 20%, and in addition, we heard that Tesla would do so. Shortening Cybertruck production shifts at Gigafactory Texas (Although CEO Elon Musk recently insisted that Cybertruck production is currently restricted.)

Now those rumors have been confirmed — albeit to a smaller extent — in a company-wide email sent by Musk, which leaked shortly after it was sent. The full text of the email is below:

Over the years, we have achieved rapid growth with the expansion of many factories around the world. With this rapid growth, there was a duplication of job roles and tasks in certain areas. As we prepare the company for the next stage of growth, it is extremely important to consider every aspect of the company to reduce costs and increase productivity.

As part of this effort, we undertook a comprehensive 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 has to 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 leaving Tesla for their hard work over the years. I am deeply grateful for your many contributions to our mission and wish you well in your future opportunities. It's so hard to say goodbye.

As for those remaining, I would like to thank you in advance for the difficult task that still lies ahead. We are developing some of the most revolutionary technologies in automotive, energy and artificial intelligence. As we prepare the company for the next stage of growth, your determination will make a huge difference in getting us there.

Thanks,
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In addition, there are reports that some employees have already been blocked from accessing the system.

While we don't have an exact percentage, “more than 10%” means that at least 14,000 employees will be laid off, as Tesla's headcount is at about 140,000 employees (it's worth noting that Tesla's headcount has not seen as much growth). “quick” in recent years as it has in the past, making this line of emails somewhat ringing).

We don't know which specific teams will be most or least affected by Tesla's layoffs, but two popular Tesla executives are now missing the “Tesla affiliate” badge on Twitter – Drew Baglino And Rohan Patel.

Baglino is Still listed As senior vice president of powertrain and power on Tesla's website, Patel is Tesla's head of policy who also served as Tesla's impromptu PR arm on Twitter, commenting on news in place of Tesla's still inexplicably non-existent PR department.

While this may not mean anything, the badge Do It still exists and is shown on Profile of Franz von Holzhausenit is clearly missing from the above-mentioned executives.

This news comes on the heels of a poor quarterly delivery report in which Tesla significantly missed delivery estimates and saw a rare decline in sales year over year. While Tesla is not making sales by geographic region, the main decline appears to have come from China, where Chinese electric vehicle makers are rapidly growing in the domestic and export market.

Tesla will report its quarterly earnings next Tuesday, April 23. Analysts estimate Tesla will still earn about 50 cents per share, down from 85 cents per share in the first quarter of 2023.

In previous quarters, Tesla has taken a “pause” between growth phases, anticipating sales growth to be more modest until next-generation vehicles like the roughly $25,000 Model 2 are released (although Reuters recently reported that Musk wants to shift focus Tesla is working on a robotaxi model, which Musk denied just hours before the robotaxi unveiling event was announced.)

Tesla's layoffs come at a time when many other companies in the tech industry are laying off employees, in a clear game of follow the leader while… Industry profits remain high.

Take Electric

One problem I always have with Tesla is that, if anything, the number of employees at the company seems to be so-so very low, not very high. There are a lot of issues that seem to fail (both high and low – Tesla owners, have you ever had trouble contacting someone for service?), and I think it's because Tesla employees are often overworked. This leads to fatigue and change, a lack of institutional memory, and a lack of ownership of some problems that cannot be solved.

Tesla owes much of its success to its “startup mentality,” where all hands are on board to grow the company that is shaking up two of the largest entire sectors on Earth — automobiles and energy. The truth of that he have That these sectors have been successfully shaken up is evidence that this approach has been effective.

This helps with hiring, too – there are plenty of jobs out there that claim to be changing the world, but Tesla can really claim to be at the forefront of a changing transportation industry. This is a great way to hire the best and the brightest, and as a result, the company hasn't had to worry as much about losing talent since it has this hiring advantage and can pick the brightest minds out there (although that hiring advantage could change, given Musk's particularly obnoxious behavior growing).

However, Tesla I am 20 years old now. It's a huge, well-established company. It needs to mature and have more established operations, lower turnover, and more security for its employees. These types of things help reduce errors and boost morale.

While these layoffs are a reaction to declining sales (but not a loss of money if analysts are to be believed — Tesla is likely still profitable, though we'll hear more next Tuesday), they can't help lift the spirit. Moral.

The remaining employees will wake up to an email from the CEO who is increasingly absent because he spends all his time addicted to an app he uses. Wasted $44 billion on… (However, it takes more equity to spin off 10% of the company.) He watched his already heavy workload increase, and wondered if the feeling of changing the world was really worth all these newfound negativity. They might be wondering if getting caught up in the new tech buzzwords wouldn't be so bad.

This is unfortunate, because we need Tesla to continue to push things forward, and to continue attracting the best and the brightest. While Pandora's box is open and electric vehicles are here to stay at this point, regardless of Tesla's relatively rare rises and falls, the rest of the industry is still trying hard to rein in the shift, even if it means America will be less competitive. If they get their way.

Tesla is one of the few entities large enough and committed enough to push those timelines forward, whether the rest of the industry likes it or not. We need a healthy Tesla, and for that we need good employee morale.