Less than two weeks after Tesla announced its first year-over-year delivery decline since 2020, CEO Elon Musk sent an internal email to staff saying the company would cut at least 10% of its global workforce .
Musk’s note, sent at nearly midnight PST on Sunday in California, explained that “there has been duplication of job roles and functions in some areas” and that the layoffs would occur “to reduce costs and increase productivity.” productivity”.
Tesla executives, including the senior vice president Drew Bagliano and president of policies Rohan Patel, also announced Monday that he will be leaving the company. Patel told TechCrunch that he chose to leave because of “[b]big overall changes” at Tesla.
Elon Musk, owner of Tesla and the X platform (formerly Twitter). Photo by Beata Zawrzel/NurPhoto via Getty Images
Tesla employees shared rumors of layoffs of up to 20% with Electrek on Sunday.
Musk’s email confirmed that the percentage was “greater than 10%” without specifically saying how many employees will be affected.
Tesla had 140,473 employees globally as of Dec. 31, according to its 2023 annual report, meaning at least 14,000 people will be affected.
Related: Tesla sales and deliveries decline for first time since 2020
Bloomberg reported in February that Tesla asked managers whether the work of each of their employees was critical to the company, sparking fears of layoffs. Tesla also decided not to give merit-based stock bonuses last year.
Tesla last laid off 27 employees in Buffalo, New York, in February 2023.
Related: ‘Next Tesla’ Electric Car Startups Hit Slowdown: ‘Investors Want to See Demand’
The layoffs follow Tesla’s report in early April that deliveries fell 8.5% year over year due to factors such as factory closures. Lower-than-expected demand may also have played a role.
Earlier this month, Musk said the Tesla Robotaxi, a new autonomous offering from Tesla, will be unveiled in August.
Tesla will release its financial results for the first quarter of 2024 on April 23.
Related: Elon Musk reveals when Tesla will release its first Robotaxi
Several media outlets, including Electrek, Reuters and Business Insider, viewed the memo.
Here’s the full internal email about Tesla’s layoffs, obtained by Business Insider on Monday:
Over the years, we have grown rapidly with numerous factories around the world. With this rapid growth has come a duplication of roles and job functions in some areas. As we prepare the company for our next phase of growth, it is extremely important to examine every aspect of the company to reduce costs and increase productivity.
As part of this commitment, we conducted 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 has to be done. This will allow us to be lean, innovative and eager to take on the next growth phase cycle.
I would like to thank everyone leaving Tesla for their hard work over the years. I am deeply grateful for your many contributions to our mission and wish you well in your future opportunities. It’s very difficult to say goodbye.
For those who remain, I would like to thank you in advance for the difficult work that remains to be done. We are developing some of the most revolutionary technologies in automotive, energy and artificial intelligence. As we prepare the company for the next phase of growth, your determination will make a huge difference in getting us there.
Thank you,
Elon