Tesla CEO Elon Musk has announced a significant restructuring of the company, including a workforce reduction of at least 10% globally and the departure of two key executives. The changes come as Tesla gears up for a new phase of growth and innovation within its automotive business.
Musk stated that Tesla undergoes a reorganization every five years to “reorganize and streamline the company for the next phase of growth.” This latest restructuring is aimed at preparing the company for the launch of a new, next-generation vehicle platform, scheduled to begin in the second half of 2025. This platform will underpin upcoming vehicles such as the Robotaxi and a rumored $25,000 vehicle.
About every 5 years, we need to reorganize and streamline the company for the next phase of growth
— Elon Musk (@elonmusk) April 15, 2024
Despite recent product updates, including a refreshed Model 3 and the launch of the Cybertruck, Tesla is expecting “notably lower” growth rates in 2024 and early 2025 as it focuses on the new platform.
As part of the restructuring, Tesla announced layoffs affecting around 10% of its global workforce. Additionally, Senior Vice President of Powertrain Drew Baglino and Vice President of Public Policy and Business Development Rohan Patel have left the company. Both executives have been with Tesla for several years.
In an email to employees, Musk emphasized the importance of cost reductions and increased productivity as Tesla prepares for its next growth phase. He stated, “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.”
