Tesla is laying off more than 10% of its global workforce — a move CEO Elon Musk called a “difficult decision” for the company as it grapples with falling sales amid an intensifying price war for electric vehicles.
The layoffs were annnounced in an internal memo sent to Tesla’s global employees. Per the company’s latest annual report, it touted 140,473 staffers as of December 2023.
Though the memo didn’t specify how many jobs would be affected, a reduction of more than 10% means that at least 14,047 employees of the world’s largest electric automaker are set to get a pink slip.
“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,” Tesla chief Elon Musk wrote.
“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,” he added in the memo, which was first reported by tech publication Electrek.
Tesla’s stock dropped over 2% in pre-market trading following news of the impending layoff — which comes less than two weeks after the company posted its first year-over-year drop in quarterly car deliveries since 2020.
Tesla reported earlier this month that it delivered 386,810 vehicles globally in the first three months of 2024 — down more than 9% from the 422,875 vehicle sales in the first quarter of last year. The number came in well below Wall Street’s expectations of 457,000 deliveries.
The Austin, Texas-based company had produced more than 433,000 vehicles intended to be delivered during the first quarter, meaning roughly 12% of its inventory went unsold.
Despite the shortfall, the results were enough for Tesla to reclaim the title as the world’s top EV seller from BYD.
Tesla lost the title to BYD late last year at a time when the Chinese-made EV rival was touted for offering higher-volume models that cost much less than what Tesla charges for its cheapest Model 3 sedan in China.
Short for Build Your Dreams, the carmaker backed by Warren Buffett sold 300,114 all-electric vehicles globally in the first three months of the year, up 13% from the same period in 2023.
Elsewhere in China — which has been stepping on the gas in the race for global domination of the auto industry — Japanese automaker Nissan has also laid out plans for 30 new vehicles — 16 of which are set to be all-electric.
The company said this month that seven of its forthcoming new models will be reserved for the US and Canada alone, though it wasn’t immediately clear how many of those vehicles would be fully electric.
Nissan also teased in its press release that the Americas will be getting “e-POWER and plug-in hybrid models,” which use a mix of electricity and fuel for power.
Meanwhile, Tesla has been slow to refresh its aging models and even said this month that it was canceling a long-promised inexpensive car that investors have been counting on to drive mass market growth.
Tesla, which is set to report its full financials for the first quarter of 2024 on April 23, is braced for a slowdown in 2024 after years of rapid sales growth.
Representatives for Tesla did not immediately respond to The Post’s request for comment.
In the fourt quarter of 2023, Tesla recorded a gross profit margin of 17.6% in the fourth quarter — its lowest in more than four years.
The firm is now looking to shore up its margins despite slashing its headcount for the second time in a little over a year.
Tesla had previously laid off 4% of its workforce in New York in February last year as part of a performance review cycle and before a union campaign was to be launched by its employees.
With Post wires
