Tesla, the electric vehicle manufacturer owned by Elon Musk, is reportedly considering a reduction in its global workforce by more than 10%, attributing the move to redundant job roles. It was reported by tech publication Electrek on Monday.
Should this decision be implemented across the company, it could result in the layoff of over 14,000 employees potentially.
In an internal email obtained by electrick.com, CEO Musk highlighted the company’s rapid expansion as a factor leading to duplicated roles and emphasized the necessity of cost reduction for the forthcoming phase of growth.
“As we gear up the company for our next phase of expansion, it’s crucial to scrutinize every aspect of our operations for cost-saving measures and enhanced efficiency. As part of this initiative, we’ve conducted a comprehensive evaluation of our organizational structure and made the challenging choice to trim our workforce by over 10% on a global scale. It’s a decision I deeply regret, but one that is imperative,” he expressed.
In Musk’s memo, he emphasized the significance of scrutinizing every aspect of Tesla as the company gears up for its forthcoming phase of expansion, stressing the need for cost reductions and enhanced productivity.
As per its most recent annual report, the largest auto maker by market value had a global workforce of 140,473 employees as of December.
How Many Tesla Employees Could Be Affected?
Tesla concluded the previous year with a workforce of 140,473 employees, which doubled compared to its total three years prior. With the company scaling up production at two facilities, one in Austin and the other outside Berlin, the layoffs, if implemented across the company, could impact a minimum of 14,000 employees.
The declaration follows shortly after Tesla reported a decline in vehicle deliveries, despite its efforts to stimulate demand by implementing a sequence of price reductions on its electric vehicles.
Additionally, the tech mogul is slated to rendezvous with Prime Minister Narendra Modi during his upcoming visit to India later this month. It is anticipated that during this meeting, he will unveil his intentions regarding the establishment of a new Tesla factory in the country. “Eagerly anticipating my meeting with Prime Minister Narendra Modi in India!” he shared on his X profile.
Looking forward to meeting with Prime Minister @NarendraModi in India!
— Elon Musk (@elonmusk) April 10, 2024
Although a meeting date has not been finalized, the Prime Minister has expressed his openness to global investment in India. Earlier this month, Musk remarked that it would be a logical step for Tesla to introduce electric vehicles in India.
This visit coincides with India’s recent announcement of a new electric vehicle policy aimed at significantly reducing taxes on EV imports by nearly 85%. The policy mandates EV manufacturers to commit a minimum investment of ₹4,150 crore and allows them three years to establish manufacturing facilities within the country.
CFO’s Remark
During Tesla’s earnings call in January, Chief Financial Officer (CFO) Vaibhav Taneja emphasized the importance of pursuing every available opportunity to maximize savings, highlighting the dedication of the company’s highly focused team towards this goal.
Tesla, slated to disclose its quarterly earnings on April 23, experienced a decrease in vehicle deliveries during the first quarter, marking its first decline in nearly four years and falling short of market projections.
In parallel, the company has opted to cancel its initiative to manufacture a low-cost vehicle, abandoning one of Musk’s enduring objectives to create affordable electric vehicles for widespread adoption.
It is also worthnoting that during premarket trading on Monday, Tesla shares saw a 0.8% decrease.
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