Electric vehicle (EV) manufacturer Tesla is laying off many workers to save costs and improve efficiency, according to an internal communication from CEO Elon Musk.
Elon Musk indicated in an email that the EV maker will cut worldwide staff by "more than 10%." Tesla's workforce in 2023 was around 140,000; therefore, these Tesla layoffs could affect over 14,000 people, according to a report from TechCrunch.
Tesla downsized after reporting its first year-over-year sales dip in three years, as well as a wider drop in electric car demand. Musk warned investors that revenue growth in 2024 may fall below the company's 50% forecast. Tesla is also in between product cycles, with the Cybertruck and Model Y now in their fourth year without improvements.
Elon Musk: Tesla Job Cuts Are Necessary
Tesla's top executive stressed in the email that the corporation must examine all aspects to save costs and boost efficiency. He said Tesla's rapid growth created redundant roles and functions, necessitating layoffs.
Elon Musk wrote, "As part of this effort, we have done a thorough review of the organization and made the difficult decision to reduce our headcount by more than 10% globally. There is nothing I hate more, but it must be done."
Tesla shipped a record 1.8 million EVs in 2023, but high financing rates and worldwide competition forced price cutbacks on its popular models. The business has also apparently canceled or postponed plans to produce a cheaper EV in favor of a platform for a speculated robotaxi, due to launch on August 8.
According to a report from The Guardian, Tesla's output has dropped due to a variety of issues, including Red Sea shipping route assaults and an arson attempt on one of its European plants. The company's latest performance measures show that these failures have corresponded with a global demand downturn.
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(Photo : HECTOR RETAMAL/AFP via Getty Images)
In this aerial view the Tesla Gigafactory that produces electric cars stands on January 12, 2024 near Gruenheide, Germany.
Elon Musk denied that his negative public image caused the sales drop. Instead, he noted that companies like BYD were also struggling, acknowledging the challenges that the sector is facing.
Tesla runs factories in Germany and China. In the US, it has EV manufacturing facilities in California, Nevada, Texas, and New York.
Tesla Faces Cybertruck Delivery Delays
Meanwhile, TechTimes previously reported that delivery delays reportedly left several Tesla Cybertruck clients disappointed. The Cybertruck Owner's Club forum and other sources revealed that Tesla informed customers with booked delivery appointments of the cancellations. Forum members suggest accelerator lubrication difficulties may cause pedal slippage and delays. The Whole Mars Blog's Omar estimated a seven-day delay in Tesla Cybertruck deliveries.
Tesla apologized to affected customers for the Cybertruck delivery delay and cancellation of delivery. The firm told consumers they would be contacted again when Cybertruck delivery scheduling difficulties were fixed.
Despite the challenge, Tesla has increased output at its Austin Gigafactory, wherein it manufactures 900-1,000 units weekly, per reports. Tesla delivered 2,803 Cybertrucks in Q1, according to Cox Automotive.
Moreover, Tesla is using the Cybertruck to exhibit its cutting-edge electric vehicle technology at several national and international events in China, Japan, and Germany.
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