Tesla lays off 14,000 or 10% of its workforce, reveals leaked email from Elon Musk

On Monday morning reports started surfacing claiming that Tesla was gearing up to lay off approximately 10 per cent of its global workforce. However, more recent updates have surfaced which suggests that the Elon Musk-led EV giant may have already let go of around 15,000 employees worldwide.

The information came to light through a company-wide email from CEO Elon Musk, as reported by Electrek. Musk cited duplication of roles and job functions as the primary reasons behind the layoffs, driven by Tesla’s rapid expansion.

He clarified that this move is part of Tesla’s strategic plans for future growth and aims to enhance productivity.

Over the years, we have grown rapidly with multiple factories scaling around the globe. With this rapid growth there has been duplication of roles and job functions in certain areas. As we prepare the company for our next phase of growth, it is extremely important to look at every aspect of the company for cost reductions and increasing productivity.

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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. This will enable us to be lean, innovative and hungry for the next growth phase cycle.

I would like to thank everyone who is departing Tesla for their hard work over the years. I’m deeply grateful for your many contributions to our mission and we wish you well in your future opportunities. It is very difficult to say goodbye.

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For those remaining, I would like to thank you in advance for the difficult job that remains ahead. We are developing some of the most revolutionary technologies in auto, energy and artificial intelligence. As we prepare the company for the next phase of growth, your resolve will make a huge difference in getting us there.

Thanks,
Elon

The move comes after months of rumours of Tesla’s downsizing. These rumours started after Tesla’s senior management sent directives to team leaders to identify key members and workers, suspend certain stock rewards, and cancel annual reviews pending further instructions.

While the exact scale and specific teams affected by the layoffs remain undisclosed, Musk’s email, which has reportedly surfaced online, indicates that at least 10 per cent of the employees have been let go. This implies that at least 14,000 employees, considering Tesla’s total workforce consists of at least 1,40,000-1,50,000 people.

Notably, two prominent Tesla executives, Drew Baglino and Rohan Patel, no longer carry the “Tesla-affiliated” badge on their X-profiles. Belingo is still listed as Senior VP of Powertrain and Energy on Tesla’s website, while Patel heads Tesla’s Policy department, and has also served on Tesla’s PR team.

While their positions remain unchanged on Tesla’s website, this development has sparked speculation about potential organisational changes within the company.

Tesla is set to release its quarterly profits report next Tuesday, with analysts estimating a profit of around 50 cents per share, down from 85 cents per share in the first quarter of 2023. Previous quarters have seen Tesla forecasting a “pause” between growth phases, anticipating more modest sales growth until the launch of next-gen vehicles like the rumoured $25,000 Model 2.

The timing of Tesla’s layoffs coincides with a trend of workforce reductions in the tech industry, despite high industry profits, suggesting a broader pattern of adjustments among companies in response to evolving market dynamics.

(With inputs from agencies)