Electric car leader Tesla is set to lay off over 14,000 employees, representing more than 10% of its global workforce. This news comes amidst declining sales and intensifying competition in the electric vehicle market.
In a company memo, CEO Elon Musk explained the decision as a necessary step for "cost reductions and increasing productivity" to prepare Tesla for its "next phase of growth." While Tesla has undergone workforce reductions before, the scale and context of this round differ significantly.
"This was a difficult decision," Musk reportedly wrote, "but as we prepare for the next phase of growth, it's crucial to evaluate every aspect of the organization for efficiency."
The announcement follows comments by Musk suggesting a company-wide reorganization happens roughly every five years to streamline operations. However, Tesla's current situation is more complex. The company reportedly missed car delivery targets for the month, marking its first quarterly decline in four years. This decline coincides with a heating-up price war in the EV market, putting pressure on Tesla's sales and profitability.
This move signifies a significant shift for Tesla, which previously experienced periods of rapid growth. The size and reasoning behind the layoffs suggest a strategic response to navigate a changing market landscape. Tesla currently employs over 140,000 people worldwide according to Layoffs.
Play audio
No comments