Tesla is set to reduce its global workforce by 10% as the demand for electric vehicles declines and competition from China increases.
As the largest electric car manufacturer globally, Tesla plans to eliminate about 14,000 jobs from its staff of approximately 140,000.
Elon Musk, the CEO, communicated this “difficult decision” through an internal memo that leaked to Electrek.
In the memo, Musk noted, “Throughout the years, our rapid expansion included the opening of multiple factories worldwide. This led to overlapping roles and job functions. As we gear up for the next growth stage, it’s crucial to examine all aspects of our operations for potential cost savings and enhanced productivity.”
He continued, “In this vein, we’ve conducted an extensive review of our organization and made the tough choice to cut our global headcount by over 10%. I deeply regret these actions, but they are necessary. These reductions will position us to remain lean, innovative, and driven in our upcoming growth cycle.”
Tesla has been approached for a comment on these job cuts, which follow the company’s first decline in quarterly car sales in four years.
The company attributes the challenging start of the year to initial production issues with the updated Model 3 at its California plant and interruptions caused by the Red Sea conflict and arson at Gigafactory Berlin, which led to factory shutdowns.
Tesla’s shares have dropped more than 40% since July, facing intense competition from Chinese rivals like BYD.
Recent industry data indicates a significant slowdown in electric vehicle demand in Britain, suggesting a shift back to petrol cars. The Society of Motor Manufacturers and Traders (SMMT) reported that while EV registrations increased by 3.8% year-over-year, this growth pales in comparison to the 10% rise in the overall car market, with hybrid and petrol cars experiencing the most substantial growth.
