Create a free Industrial Equipment News account to continue

Tesla to Cut More Than 10% of Workforce

That's 14,000 jobs, or more.

The push towards electrics means changes in the automotive industry are impacting every OEM – even those tailor made for it.

Elektrek first reported that EV leader Tesla is cutting “more than 10%” of its workers. Citing an internal memo, the company is reportedly looking at “cost reductions and increasing productivity” and will target its global workforce. While no hard number was released, 10% of Tesla’s worldwide staff would amount to 14,000 job cuts or more.

Elektrek says the writing has been on the wall, and their sources said - in the weeks leading up to the memo - managers were being asked to identify their critical team members. The company also paused some bonuses and canceled performance reviews while also cutting production at its plant in China.

Most Read on IEN: 

Musk’s email memo also suggests that the company’s rapid scale led to redundancies in Tesla’s workforce, though experts believe there is more to the story – including Tesla’s slow rollout of new models, lower delivery volumes and multiple price cuts impacting its profit margin.

From a market standpoint, Reuters cites Craig Irwin, a research analyst at Roth Capital, who said that the layoffs indicate that Tesla believes weak growth in the EV sector will continue.

Tesla has faced a rash of other problems in recent weeks, including settling a lawsuit filed by the family of a man who was killed in a crash while allegedly using Tesla’s Autopilot autonomous driving system. Not to mention, the automaker’s stock has dropped some 30% so far this year after a delivery slowdown, amid recurring problems with the company’s long-anticipated Cyber Truck.

In the memo, CEO Musk says there is “nothing [he] hates more” than having to lay off staff, but that leaning out the organization will enable Tesla to be “innovative and hungry for the next growth phase cycle.”

Click here to subscribe to our daily newsletter featuring breaking manufacturing industry news.

More in Video