Tesla set to lay off 15,000 employees, over 10% of global workforce

Tesla, the electric vehicle (EV) giant, is set to lay off more than 10% of its staff, as reported by tech publication Electrek. This decision comes as Tesla aims to streamline its operations and adjust to changing market conditions. The layoffs are part of a broader effort to reorganize the company and ensure its long-term sustainability.

According to an internal memo cited by Electrek, Tesla has instructed managers to identify critical team members. The company has also paused some stock rewards and canceled some employees’ annual reviews. Additionally, Tesla has reduced production at its Gigafactory Shanghai, signaling a shift in its manufacturing strategy.

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As of December 2023, Tesla had 140,473 employees globally, according to its latest annual report. The reported layoffs are expected to affect approximately 15,000 workers, representing a significant workforce reduction.

Tesla’s decision to lay off employees comes amid a challenging period for the company. In the first quarter of this year, Tesla reported a decline in vehicle deliveries, marking its first such decline in nearly four years and falling below market expectations. The company is set to report its quarterly earnings on April 23, where it is likely to provide more details on its financial performance and future plans.

Despite its recent challenges, Tesla has continued to innovate in the EV space. However, the company has scrapped plans to produce an inexpensive car, abandoning a goal set by CEO Elon Musk to make affordable EVs for the masses. This decision reflects Tesla’s shift in focus towards more profitable segments of the market.

Tesla’s stock was down 0.6% in premarket trading on Monday, reflecting investor concerns about the company’s future prospects. After years of rapid sales growth that propelled Tesla to become the world’s most valuable automaker, the company is now facing a slowdown in 2024.

Several factors have contributed to Tesla’s challenges, including consumer preferences, economic conditions, and competition. In particular, high interest rates have dampened consumer appetite for big-ticket items like EVs. Additionally, rivals in China, the world’s largest auto market, are rolling out cheaper models, posing a competitive threat to Tesla.