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Tesla to reduce global workforce by 10%

By Esther Muhozi
On 16 April 2024 at 12:57

In a move that sent ripples through the automotive world, Tesla, Inc. announced plans to reduce its global workforce by more than 10%. This decision comes amidst a backdrop of intensified competition and softer demand in the electric car sector, prompting the company to streamline operations and enhance productivity.

CEO Elon Musk conveyed the news in an email to Tesla employees, citing the necessity for "cost reductions and increasing productivity" as driving factors behind the layoffs. The email that was initially reported by Electrek and later confirmed by Reuters, underscored the challenges facing Tesla as it seeks to maintain its position in a rapidly evolving market.

Tesla’s workforce, which had nearly doubled since the end of 2020, reflects the company’s ambitious expansion efforts in recent years. However, a year-over-year decline in sales during the first quarter of this year, coupled with increased competition from rivals like Chinese automaker BYD, has prompted Tesla to reevaluate its growth trajectory.

The decision to downsize marks a departure from Tesla’s previous trajectory of exponential hiring. After significant increases in staff in 2021 and 2022, the company experienced more modest growth in 2023. The latest round of layoffs follows previous workforce reductions, including a 7% cut in 2019 and further trimming of salaried staff in 2022.

This is not the first time that Tesla has cut staff. It announced a 7% cut in staff in 2019, in a statement posted online at that time. And it trimmed about 10% of salaried staff even as it continued to hire hourly staff in 2022.Those 2022 cuts were confirmed by a public statement from Musk at that time. But neither he nor Tesla have publicly confirmed this latest round of cuts. Tesla, which does not have a public relations staff, did not respond to a request for comment on that report and did not confirm the email.

Shares of Tesla, which were already down 31% so far this year through Friday’s close, fell another 3% in early trading Monday on the job cut report.


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