Tesla, the global electric vehicle (EV) giant, is gearing up to lay off more than 10% of its workforce amidst declining sales, according to reports from tech publication Electrek.
CEO Elon Musk emphasized the importance of cost reductions and increased productivity as the company prepares for its next phase of growth. Managers have been instructed to identify critical team members, certain stock rewards have been put on hold, and annual reviews for some employees have been canceled. Moreover, production at Gigafactory Shanghai has been scaled back.
With approximately 140,473 employees globally as of December 2023, Tesla is expected to cut around 15,000 jobs in this round of layoffs. The company has not yet provided official comments on the potential layoffs.
This announcement comes ahead of Tesla's quarterly earnings release scheduled for April 23. The company faced a decline in vehicle deliveries in the first quarter, marking its first decrease in nearly four years and falling below market expectations.
In a notable shift, Tesla has abandoned plans to produce an affordable car, deviating from Elon Musk's longstanding goal of making electric vehicles accessible to a broader audience.
Tesla shares experienced a 0.6% decline in premarket trading on Monday. The company, which previously enjoyed rapid sales growth, is now anticipating a slowdown in 2024 due to delayed updates to existing models and reduced consumer demand caused by high-interest rates. Additionally, competitors in China, the world's largest auto market, are introducing more affordable alternatives.
