► Major cutbacks at Tesla
► A tenth of 140k staff to be cut
► Shows difficulties facing EV makers
Tesla plans to lay off a tenth of its staff worldwide, it emerged in a memo to employees, underlining the difficulties faced by all car makers, especially those trying to grow their electric vehicle (EV) range.
Owner Elon Musk wrote to staff on Monday. ‘We have done a thorough review of the organisation and made the difficult decision to reduce our headcount by more than 10% globally,’ said the memo, which was first reported by electric car site Electrek.
‘There is nothing I hate more, but it must be done. This will enable us to be lean, innovative and hungry for the next growth phase cycle.’
In news that will resonate with staff at X, the social media company previously known as Twitter that Musk bought in 2022, Tesla employees reported being locked out of their emails and work systems, in a sign their roles were being made redundant. Other staff will reportedly have stock reward schemes paused and annual reviews suspended.
Tesla cutbacks linked to softening demand for EVs
Tesla will announce its first quarterly results later in April 2024, but there are already signs that the US company is not immune from the volatile demand for electric cars. It has reduced production at its Chinese Gigafactory in Shanghai and recently cut production of its Cybertruck in Austin.
Tesla is expected to announce its first quarterly fall in deliveries in four years at its earnings call on 23 April 2024.
In many ways, it’s a perfect storm facing all EV manufacturers: governments and policy are pushing sales of zero-emissions EVs, but battery prices remain stubbornly high, charging infrastructure patchy at best and consumer demand wavering, throttled certainly in the UK by damaging reports in the mainstream media. And that’s before we even mention the crippling economics of Chinese EV brands arriving in Europe at scale…
Tesla has not yet officially commented on the reported cutbacks. Its annual report said it had 140,473 employees at the end of 2023, pointing to around 15,000 redundancies.