Tesla is reportedly expanding its layoffs in China, with additional cuts beginning earlier this week following mid-April layoffs, according to Bloomberg, citing sources familiar with the matter.
The latest round of layoffs impacts various departments at Tesla’s Shanghai factory, including customer service staff, engineers, production line workers, and the logistics team.
Last month’s layoffs at Tesla primarily affected sales representatives, according to the report.
The exact number of employees affected and the impact on Tesla’s operations in China remain unclear.
Affected employees in China will receive compensation equivalent to one month’s salary for each year of service, plus three months’ pay, according to a source.
Some employees were escorted out of the workplace by managers, while others left in groups via shuttle bus, Bloomberg reported.
In addition to the ongoing layoffs, Tesla’s China operations will see the return of Tom Zhu, who previously led Tesla’s Asia-Pacific operations and spearheaded the company’s entry into China.
Zhu was promoted to senior vice president of automotive in April 2023, overseeing global production, sales, delivery, service, and the company’s factory at Tesla’s Austin headquarters.
Tesla CEO Elon Musk announced in an internal memo last month that the company would lay off more than 10 percent of its global workforce in response to declining sales and increasing competition in the EV market.
As of December 31, 2023, Tesla had 140,473 employees worldwide, with approximately 20,000 in China.
Tesla’s global layoff plan includes team employees in China, including sales, according to Reuters.
Tesla’s Shanghai factory produces the Model 3 sedan and Model Y crossover, serving both local consumers and as an export hub.
Tesla models remain popular in China, particularly the Model Y, but the company faces growing competition and challenges amid low consumer sentiment.
Nio announced it will launch its sub-brand Onvo (Ledao in China) on May 15, with its first model, the Onvo L60, competing directly with Tesla’s Model Y.
Tesla China’s April sales totaled 62,167 vehicles, down 18.03 percent from the same month last year and down 30.20 percent from March.