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Tesla lays off 14,000 or 10% of its workforce, reveals leaked email from Elon Musk

On Monday morning, reports started surfacing claiming that Tesla was gearing up to lay off approximately 10 percent of its global workforce. However, more recent updates suggest the Elon Musk-led EV giant may have already laid off around 15,000 employees worldwide.

The information came to light through a company-wide email from CEO Elon Musk, as reported by Electrek. Musk cited the duplication of roles and job functions as the primary reason behind the layoffs, driven by Tesla’s rapid expansion.

He clarified that this move is part of Tesla’s strategic plans for future growth and aims to enhance productivity.

Over the years, we have proliferated, with multiple factories scaling around the globe. With this rapid growth, roles, and job functions have been duplicated in certain areas. As we prepare the company for our next development phase, it is essential to examine every aspect of the company for cost reductions and increased productivity.

As part of this effort, we have thoroughly reviewed the organization and decided to reduce our headcount by more than 10% globally. There is nothing I hate more, but it must be done. This will enable us to be lean, innovative, and hungry for the next growth phase cycle.

I want to thank everyone departing Tesla for their hard work. I’m deeply grateful for your many contributions to our mission, and we wish you well in your future opportunities. It is tough to say goodbye.

For those remaining, I would like to thank you in advance for the difficult job that remains ahead. We are developing some of the most revolutionary technologies in auto, energy, and artificial intelligence. As we prepare the company for the next growth phase, your resolve will make a huge difference in getting us there.

Thanks,
Elon

The move comes after months of rumors of Tesla’s downsizing. These rumors started after Tesla’s senior management sent directives to team leaders to identify critical members and workers, suspend certain stock rewards, and cancel annual reviews pending further instructions.

While the exact scale and specific teams affected by the layoffs remain undisclosed, Musk’s email, which has reportedly surfaced online, indicates that at least 10 percent of the employees have been let go. This implies at least 14,000 employees, considering Tesla’s total workforce consists of at least 1,40,000–1,50,000 people.

Notably, two prominent Tesla executives, Drew Baglino and Rohan Patel, no longer carry the “Tesla-affiliated” badge on their X-profiles. Belingo is still listed as Senior VP of Powertrain and Energy on Tesla’s website, while Patel heads Tesla’s Policy Department and has also served on Tesla’s PR team.

While their positions remain unchanged on Tesla’s website, this development has sparked speculation about potential organizational changes within the company.

Tesla is set to release its quarterly profit report next Tuesday. Analysts estimate a profit of around 50 cents per share, down from 85 cents per share in the first quarter of 2023. Previous quarters have seen Tesla forecasting a “pause” between growth phases, anticipating more modest sales growth until the launch of next-gen vehicles like the rumored $25,000 Model 2.

The timing of Tesla’s layoffs coincides with a trend of workforce reductions in the tech industry despite high industry profits, suggesting a broader pattern of adjustments among companies in response to evolving market dynamics.

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