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Tesla lays off 10% of global workforce as sales fall
Insights from CNBC, Electrek, and AP
The News
Tesla is laying off more than 10% of its global workforce as the electric vehicle giant struggles with a drop in sales, according to a company memo. As many as 14,000 employees are expected to lose their jobs.
The company’s senior vice president, who is in charge of battery development, and its vice president for public policy and business development also announced Monday that they are leaving the company.
The shakeup reflects the struggles Tesla has faced over the last few years, including a price war and heightened competition from Chinese firms. Earlier this month, Tesla reported its first year-on-year quarterly sales decline in more than three years, leading to the possibility that the company won’t deliver the same number of vehicles in 2024 as last year.
SIGNALS
All eyes now on Tesla quarterly results
Tesla was dethroned last year as the world’s largest EV maker by Chinese giant BYD, and responded by introducing price cuts and incentives such as insurance subsidies amid a price war in the Chinese market. The next indication of Tesla’s performance will be its full first-quarter results on April 23. That will help answer whether this is the first of many job cuts, CNBC auto industry reporter Phil LeBeau said, or whether CEO Elon Musk is sending a sign that the cuts are a one-time move to “shore up as much as possible as we go through this period … where this is just a tighter market overall for EVs and where the pricing war shows no sign of ending.”
Poor employee morale threatens growth — and broader EV transition
Ironically, Tesla may be struggling because it’s too small, not too big. That’s the take from Electrek, an EV-focused outlet that first reported the layoff news. The company’s success was largely due to its “startup mentality,” but that’s caused a lot to fall through the cracks and dragged down employee morale, journalist Jameson Dow wrote. And Musk’s increased focus on social media platform X is leading the CEO to be more absent, which likely isn’t helping, either. “Which is a shame, because we do need Tesla to keep pushing things forward” to achieve a faster transition to EVs in the U.S., Dow stated. “We need a healthy Tesla, and for that, we need good employee morale.”
