Tesla, the electric vehicle pioneer, is set to reduce its global workforce by more than ten percent, including individuals in senior management roles. This decision comes as a response to the company’s rapid growth in recent years, which has led to duplicated roles and functions within certain areas.
According to an internal email from CEO Elon Musk, as reported by US website Electrek, the move aims to streamline operations following a period of extensive expansion. While initial reports suggested a potential reduction of up to 20 percent, Musk’s email clarified that the actual figure would be “more than ten percent,” affecting at least 14,000 Tesla employees.
Electrek also hinted at another factor contributing to the layoffs, suggesting that Tesla might scale back production of its Cybertruck at the Texas factory. This follows recent production cutbacks at the Shanghai plant, where Model 3 and Model Y vehicles were being manufactured on a reduced schedule since early March.
Tesla’s first-quarter performance was impacted by several factors, including production challenges with the updated Model 3 at the Fremont factory, as well as disruptions caused by the Red Sea conflict and an arson attack at Gigafactory Berlin.
While Tesla has a history of conducting annual layoffs to address hiring inefficiencies during periods of rapid growth, recent workforce expansion has been less pronounced. The current staff cuts are likely driven by the company’s challenging quarter and the need to align production with demand.
Although unconfirmed, there is speculation that senior executives Drew Baglino, Senior VP of Powertrain and Energy, and Rohan Patel, Policy chair, could be among those affected. Their removal of the “Tesla-affiliated” badge on Twitter has fueled these rumors.
Tesla has not officially confirmed the departures of Baglino and Patel, but the company’s actions suggest that changes within the leadership team are imminent.
This move highlights Tesla’s ongoing efforts to optimize its operations and adapt to changing market conditions, ensuring its long-term sustainability and growth.
