Tesla, founded by Elon Musk, is preparing for a major wave of layoffs after an industry website reported impending cuts, citing an email from the billionaire founder and CEO of the cutting-edge electric car maker.
Electrek reported that more than 10% of Tesla’s global workforce could be laid off after the company has been preparing for downsizing for months. The news site said the cuts could affect as much as a fifth of Tesla’s workforce. Electrek quoted the email as saying:
“We have conducted a thorough review of the organization and made the difficult decision to reduce our global headcount by more than 10%. There is nothing I hate more, but it has to be done. This will allow us to be lean, innovative and hungry for the next cycle of growth.”
The email follows a difficult period for Tesla, which has struggled with a fire at its European factory, disruptions to global transportation routes and lower production. The problems culminated in an 8% drop in deliveries to fewer than 387,000 vehicles in the first quarter, well below expectations.
Rising interest rates around the world are putting pressure on consumers’ budgets and increasing financing costs. Expensive products such as electric cars are particularly at risk. Tesla cut prices, which reduced margins and increased pressure on the company’s shares.
It was the first quarterly year-over-year decline in deliveries since 2020. The decline from the final quarter of 2023 was 20%. The company’s shares have fallen about 30% this year.
Tesla employs around 140,000 people. In 2022, the company laid off around 10% of its workforce. The recommended retail price of the Model 3 in the UK is between £39,990 and £49,990.
