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Tesla is reportedly cutting more than 10% of its 140,000 employees worldwide.
The job cuts at the company, which has nearly doubled its overall headcount since the end of 2020, are just the latest example of the impact of increased competition and weak demand in the electric vehicle sector.
Reuters reports that an email sent by CEO Elon Musk to employees over the weekend attributed the layoff plan to a need to “cut costs and improve productivity.” Ta. There was no mention of weak demand for electric cars or Tesla sales.
“We have overhauled our organization and made the difficult decision to reduce our workforce by more than 10% worldwide,” he said in an email to Tesla employees. The email was first reported by EV news site Eletrek, and was also reported by Reuters.
but Tesla just reported that its sales for the first three months of this year fell from a year earlier, the first decline since the height of the pandemic four years ago. In the fourth quarter, Tesla briefly lost the global EV sales leadership position to Chinese automaker BYD. Despite the decline in sales, it took back the EV sales title from BYD in the first quarter.
Other automakers, including General Motors and Ford, are also pulling back from EV production in the face of weaker-than-expected demand for their products.In general, EV sales continue to increase across the industry But not as fast as expected. U.S. EV sales rose 40% last year, topping 1 million for the first time.
Tesla will open factories in Germany and Texas in 2022, and last year announced plans to build a factory in Mexico. However, growth in the number of employees has slowed significantly recently.
After a 40% increase in employee numbers in 2021 and 29% in 2022, the company recorded growth of just under 10%. According to company filings, the number of employees will increase in 2023, bringing the number of employees worldwide to 140,473 as of the end of last year.
This isn't the first time Tesla has cut jobs. In a statement posted online at the time, the company announced it would cut its workforce by 7% in 2019. It also cut approximately 10% of its salaried staff in 2022, although it continued to employ hourly staff.
These 2022 cuts were confirmed by Musk's public statements at the time. However, neither he nor Tesla have publicly acknowledged the cuts. Tesla, which does not have a spokesperson, did not respond to a request for comment on this report or confirm the content of the email.
Tesla stock, already down 31% since the start of the year by Friday's close, fell another 3% in early trading Monday following reports of layoffs.
Reuters contributed reporting to this story.
