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Tesla shares drop 2% as firm plans to slash more than 10% of its global staff – around 14,000 workers


  • Elon Musk sent a company-wide email over the weekend announcing the layoffs 



Tesla shares dropped this morning after the firm announced plans to lay off ‘more than 10 per cent’ of its global workforce as demands for its electric vehicles start to falter in a highly competitive market.

CEO Elon Musk sent a company-wide email over the weekend announcing the layoffs, tech publication Electrek reported on Monday.

Musk, in the internal memo, said the ‘difficult decision’ to reduce staff will ‘enable us to be lean, innovative and hungry for the next growth phase cycle’.

‘There is nothing I hate more, but it must be done,’ the billionaire said, as cited in the memo, before thanking ‘everyone who is departing Tesla for their hard work over the years’. 

Tesla, which is set to report its quarterly earnings on April 23, reported a decline in vehicle deliveries in the first quarter, its first in nearly four years and also below market expectations.

The firm, in a press release, blamed its fall in deliveries on a drop in EV car demand, the arson attack at its factory near Berlin and supply-chain issues caused by the Red Sea conflict.

Rumors of a looming layoff had been spreading over the last few months after Tesla asked managers to identify critical team members, paused some stock rewards and canceled some employees’ annual reviews, according to the report.

Tesla will lay off ‘more than 10 per cent’ of its global workforce as demands for its electric vehicles starts to falter in a highly competitive market. Pictured is a file photo of a Tesla EV at a supercharger station in California last year
CEO Elon Musk, pictured in Los Angeles on Saturday, sent a company-wide email over the weekend announcing the layoffs, tech publication Electrek reported on Monday. Musk said the ‘difficult decision’ to reduce staff will ‘enable us to be lean, innovative and hungry for the next growth phase cycle’
Tesla is also expected to shorten Cybertruck production shifts at its Gigafactory in Texas (pictured in February last year) despite Musk having recently insisted that Cybertruck is currently production constrained
Tesla shares were down 2 per cent in premarket trading on Monday

Tesla, the world’s largest automaker by market value, had 140,473 employees globally as of December 2023, according to its latest annual report. The reported cuts will affect about 14,000 workers.

The firm is also expected to shorten Cybertruck production shifts at its Gigafactory in Texas despite Musk having recently insisted that Cybertruck is currently production constrained.

The move comes as automakers across the world tighten their belts amid a slower than expected uptake of EVs. 

BP has cut over a tenth of the workforce in its electric vehicle charging business and pulled it out of several markets after a bet on rapid growth in commercial EV fleets didn’t pay off, company sources said on Monday.

However, China’s electric vehicle market is understood to be booming, with Musk just last year hailing the country’s carmakers as being ‘by far our toughest competition’.

‘I think the Chinese car companies are extremely competitive,’ he said in November, warning: ‘There’s a lot of people out there who think that the top 10 car companies are going to be Tesla followed by nine Chinese car companies. I think they might not be wrong.’

Tesla has reported a decline in vehicle deliveries in the first quarter of 2024. The firm blamed its fall in deliveries on a drop in EV car demand and the arson attack at its factory near Berlin. Pictured are police investigators inspect a damaged high-voltage pylon near the Tesla Gigafactory in Gruenheide, Germany last month
Tesla factory fire brigade checks a plant building at the Tesla Gigafactory in Gruenheide near Berlin on March 5, 2024
Fire brigade and police units work in the area of the damaged high-voltage line, near the Tesla Gigafactory in Gruenheide near Berlin, Germany on March 5, 2024
Tesla has also attributed its decline in deliveries to the supply-chain issues caused by the Red Sea conflict. Pictured is a British cargo ship sinking in the Red Sea last month after it was targeted by Yemen’s Houthi forces in international waters

Elon Musk’s email to Tesla employees that announced looming mass layoffs

Over the years, we have grown rapidly with multiple factories scaling around the globe. With this rapid growth there has been duplication of roles and job functions in certain areas. 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.

As part of this effort, we have done 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 must be done. This will enable us to be lean, innovative and hungry for the next growth phase cycle.

I would like to thank everyone who is departing Tesla for their hard work over the years. I’m deeply grateful for your many contributions to our mission and we wish you well in your future opportunities. It is very difficult to say goodbye.

For those remaining, I would like to thank you in advance for the difficult job that remains ahead. We are developing some of the most revolutionary technologies in auto, energy and artificial intelligence. As we prepare the company for the next phase of growth, your resolve will make a huge difference in getting us there.

Thanks, Elon

At the time, Musk hailed the Chinese work ethic as being ‘incredible’ and said the country was ‘super good at manufacturing’, The Street.com reported.

He also said that Tesla considered ‘the Chinese league to be the most competitive’ and added that the firm does ‘very well in China because our China team is the best’.

Musk, in the internal memo sent over the weekend, acknowledged that Tesla over the years has ‘grown rapidly with multiple factories scaling around the globe’.

‘With this rapid growth there has been duplication of roles and job functions in certain areas,’ Electrek reported, citing Musk’s statement

‘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.

‘As part of this effort, we have done a thorough review of the organization and made the difficult decision to reduce our headcount by more than 10 per cent globally.’ 

He then went on to thank those who were being let go for their ‘hard work over the years’, saying he was ‘deeply grateful for your many contributions to our mission’ and that the company ‘wishes you well in your future opportunities’.

The billionaire also addressed remaining staff and thanked them in advance for the ‘difficult job that remains ahead’ as the firm works to keep ‘developing some of the most revolutionary technologies in auto, energy and artificial intelligence’. 

It remains unknown which specific teams will be most or least affected by the layoffs – but reports indicate that some Tesla employees had already lost access to their emails and Microsoft Teams accounts by Monday. 

Meanwhile, the company has scrapped plans to produce an inexpensive car, abandoning one of Musk’s longstanding goals to make affordable EVs for the masses.

Tesla had previously laid off 4 per cent of its workforce in New York in February last year as part of a performance review cycle and before a union campaign was to be launched by its employees.

Tesla Model Y on display at the Everything Electric exhibition at the ExCeL London international exhibition and convention centre in London, Britain, March 28, 2024
Visitors check a Tesla Model 3 car next to a Model Y displayed at a showroom of the US electric vehicle (EV) maker in Beijing, China February 4, 2023

After years of rapid sales growth that helped turn Tesla into the world’s most valuable automaker, the company is bracing for a slowdown in 2024.

The EV maker has been slow to refresh its aging models as high interest rates have sapped consumer appetite for big-ticket items, while rivals in China, the world’s largest auto market, are rolling out cheaper models.

The company is looking to shore up its margins, which have been dented by repeated price cuts.

It recorded a gross profit margin of 17.6 per cent in the fourth quarter, the lowest in more than four years.

Tesla did not immediately respond to DailyMail.com’s request for comment. 



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