Tesla is set to lay off over 10% of its electric vehicle workforce worldwide.
This came following a disappointing Q1 delivery report, Tesla announced a substantial reduction in staff, mirroring actions taken by both traditional automakers and pure-play electric vehicle manufacturers, as outlined in an internal memo.
According to a memo initially disclosed by news outlet Electrek, billionaire owner Elon Musk informed employees that while it was a decision he disliked intensely, it was necessary.
According to the memo, Musk said:
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“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”.
In recent months, Tesla’s stock has suffered a significant decline, dropping by 31% since the beginning of the year. Despite the continued rise in popularity of electric vehicles globally, Tesla’s sales growth rate has decelerated, presenting a challenge for the company. Moreover, Tesla is now contending with heightened competition in the electric vehicle market.
As of December, the company boasted 140,473 employees globally, as per its most recent annual report.