The sanction did not drag on. Less than two months after reporting disappointing first-quarter sales, Tesla announced a wave of high-profile layoffs. In an email to staff, CEO Elon Musk warned that the auto company would separate from “more than 10%” of its workforce, i.e. more than 10,000 people. He justified his decision by the need to ” lower the costs “ and D’“increase productivity”, as the manufacturer faces a slowdown in demand for electric vehicles, as well as competition from new entrants into the market.
At the end of 2023, the Chinese BYD had taken first place from Tesla for sales of electric vehicles in the last quarter. Elon Musk’s brand remained the world’s best-selling brand for the whole year, but delivery figures between January and March marked Tesla’s first quarterly decline in four years. In one year, production fell by 1.6%. “We conducted a thorough review of the organization and made the difficult decision to reduce our workforce by more than 10% globally. There’s nothing I hate more, but it has to be done.”explained the founder in his note to staff, obtained by the Bloomberg News agency.
Tesla had more than 140,473 employees at the end of December 2023, almost double the 2020 workforce. The manufacturer will eliminate duplicate positions, as had already been suggested at the beginning of the year by the recommendations addressed to executives to report redundant positions in their units. Tesla also announced the elimination of end-of-year merit bonuses for certain employees. During the last earnings call on January 24, Vaibhav Taneja, the company’s chief financial officer, announced that the management team was “hyper-focused” on a strategy to rationalize and optimize expenses.
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According to the American press, workforce reductions could reach nearly 20% in certain divisions. The distribution of layoffs was not mentioned. Tesla has factories in the United States, Europe and China. “ Over the years we have experienced rapid growth with several factories expanding across the worlddescribes Elon Musk in his email. With this rapid growth, there has been duplication of roles and functions in some areas. » Since the beginning of 2022, Tesla has accelerated production of the Model Y in its two factories in Austin (Texas) and around Berlin.
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