Tesla Inc. plans to lay off approximately 14,000 employees, roughly 10% of its workforce, following a significant sales decline in the first quarter of 2024. The company reported a 9% drop in vehicle deliveries, with only 386,810 units sold compared to 423,000 in the same period last year.
CEO Elon Musk detailed the layoffs in a memo to employees, emphasizing the necessity for cost reductions as the company prepares for its next growth phase. “It is extremely important to look at every aspect of the company for cost reductions and increasing productivity,” Musk stated, as reported by multiple outlets, including The New York Times and CNBC.
Tesla’s workforce stood at 140,473 at the end of 2023. The decision comes as the company struggles with increased competition and slowing demand in the electric vehicle (EV) market, which has seen Tesla cutting prices by as much as $20,000 on some models to boost sales. These price reductions have negatively impacted profit margins and contributed to a decline in the resale value of used EVs.
In conjunction with the layoffs, two key executives announced their departures on the social media platform X. Andrew Baglino, senior vice president of powertrain and energy engineering, expressed gratitude for his time at Tesla, stating, “I loved tackling nearly every problem we solved as a team.” He plans to focus on family but has no immediate plans for future endeavors. Rohan Patel, senior global director of public policy and business development, also confirmed his departure after eight years with the company.
Following the announcements, Tesla’s stock fell by 4.8%, marking a 33% drop in value since the beginning of the year. The company’s sales slowdown reflects broader trends in the EV market, where demand has weakened despite initial strong growth.
Looking ahead, Tesla has indicated plans to unveil an autonomous robotaxi at an upcoming event in August, seeking new avenues for innovation and market engagement.