Tesla
will
lay
off
more
than
10%
of
its
global
workforce,
according
to
a
memo
sent
to
employees
by
CEO
Elon
Musk.
The
company’s
shares
closed
down
more
than
5%
on
Monday.
“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,”
Musk
said
in
the
memo
obtained
by
CNBC.
“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,”
the
memo
said.
The
memo
was
first
reported
by
Electrek.
Tesla had
140,473
employees
as
of
December
2023.
Tesla
shares
have
taken
a
bruising
in
recent
months,
falling
31%
year
to
date.
While
electric
vehicle
sales
are
still
gaining
popularity
worldwide,
their
sales
growth
rate
has
slowed
especially
for
Tesla.
The
company
now
faces
more
competition
than
ever.
To
end
2023, China’s
BYD
temporarily
dethroned
Tesla
as
the
world’s
top
EV
maker.
Chinese
smartphone
company
Xiaomi
in
March
said
it
would
sell
its
first
electric
car
for
far
less
than
Tesla’s
Model
3.
Musk
has
previously
recognized
that
China,
home
to
a
large
Tesla
factory,
may
also
house
the
company’s
strongest
competition.
“There’s
a
lot
of
people
who
are
out
there
who
think
that
the
top
10
car
companies
are
going
to
be
Tesla
followed
by
nine
Chinese
car
companies.
I
think
they
might
not
be
wrong,”
Musk
said
in
November.
Some
would-be
Tesla
customers
are
now
skipping
the
brand
owing
to
Musk’s
incendiary
rhetoric
Earlier
this
month,
Tesla
reported
its
first
annual
decline
in
vehicle
deliveries
since
2020,
when
the
Covid-19
pandemic
disrupted
production
extraneous
of
demand
—
first-quarter
deliveries
fell
by
8.5%
on
the
year
to
386,810
in
the
first
quarter,
with
output
down
1.7%
from
a
year
earlier
and
12.5%
sequentially
despite
discounts
and
incentives
offered
to
customers
throughout
the
quarter.
More
recently,
Tesla
trimmed
the
subscription
price
of
its
premium
driver
assistance
system,
marketed
as
its
Full
Self-Driving
or
FSD
option,
for
U.S.
customers.
The
move
was
sharply
at
odds
with
Musk’s
previous
pledges
that
the
FSD
fee
would
only
bulk
up
as
Tesla
added
features
and
functionality
to
the
system.
Despite
the
brand
name,
the
system
does
not
make
Tesla
vehicles
self-driving
and
requires
a
driver
attentive
to
the
road,
ready
to
steer
or
brake
at
any
time.
But
the
squeeze
on
the
company’s
operating
margin
—
which
came
in
at
8.2%
in
the
fourth
quarter,
down
from
16%
a
year
earlier
—
remains,
and
Tesla
has
warned
investors
to
brace
that
vehicle
volume
growth
this
year
“may
be
notably
lower”
than
the
rate
logged
in
2023,
saying
it
is
“currently
between
two
major
growth
waves.”
Logistical
challenges
exacerbated
Tesla’s
problems
this
year.
The
company’s
component
supply
was
a
casualty
of
disruptions
caused
by
Yemeni
Houthi
maritime
attacks
in
the
Red
Sea,
while
the
automaker’s
gigafactory
near
Berlin
was
forced
to
briefly
suspend
production
due
to
suspected
arson
at
a
nearby
electricity
substation.
In
addition
to
the
layoffs,
Tesla executives
Drew
Baglino
and
Rohan
Patel
announced
Monday
they’re
leaving
the
company.
Baglino
had
worked
with
Tesla
since
its
early
years,
starting
as
a
firmware
and
electrical
engineer
in
2006.
Patel
joined
Tesla
in
2016
after
working
as
a
senior
advisor
to
former
President
Barack
Obama
on
climate
and
other
policy
matters.
Tesla
is
scheduled
to
report
first-quarter
financial
results
on April
23.
Here’s
the
full
memo
from
Musk
(transcribed
by
CNBC):
Over
the
years,
we
have
grown
rapidly
with
multiple
factories
scaling
around
the
globe.
With
this
rapid
growth
there
has
been
duplication
of
roles
and
job
functions
in
certain
areas.
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.
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
would
like
to
thank
everyone
who
is
departing
Tesla
for
their
hard
work
over
the
years.
I’m
deeply
grateful
for
your
many
contributions
to
our
mission
and
we
wish
you
well
in
your
future
opportunities.
It
is
very
difficult
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
phase
of
growth,
your
resolve
will
make
a
huge
difference
in
getting
us
there.
Thanks,
Elon
Correction:
Tesla’s
operating
margin
came
in
at
8.2%
in
the
fourth
quarter,
down
from
16%
a
year
earlier.
An
earlier
version
misstated
a
time
element.
