Tesla to lay off more than 10% of staff globally

Tesla will lay off more than 10% of its global workforce, an internal memo seen by Reuters on Monday shows, as it grapples with falling sales and an intensifying price war for electric vehicles.

The world’s largest automaker by market value had 140,473 employees globally as of December 2023, its latest annual report shows. The memo did not say how many jobs would be affected.

Some staff in California and Texas have already been notified of layoffs, a source familiar with the matter told Reuters, declining to be named due to the sensitivity of the subject.

“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 CEO Elon Musk said in the memo.

“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,” it said.
Tesla did not immediately respond to a request for comment.

Its shares were down around 3% in early trading.

The layoffs follow an exclusive Reuters report on April 5 that Tesla had cancelled a long-promised inexpensive car, expected to cost $25,000, that investors have been counting on to drive mass market growth. Musk had said the car, known as the Model 2, would start production in late 2025.

Shortly after the story published, Musk posted “Reuters is lying” on his social media site X, without detailing any inaccuracies. He hasn’t commented on the car since, leaving investors and analysts to speculate on its future.

Reuters also reported April 5 that Tesla would shift its focus to self-driving robotaxis built on the same small-car platform. Musk posted on X that evening: “Tesla Robotaxi unveil on 8/8,” with no further details.

Tesla could be years away from releasing a fully autonomous vehicle with regulatory approval, according to experts in self-driving cars and regulation.

Monday’s letter to staff marks the second time Musk has said he would reduce headcount by 10%. In 2022, Reuters reported that Musk told executives he had a “super bad feeling” about the economy and needed to cut jobs at the automaker. Tesla never outlined how many jobs it cut in 2022, but its overall employee count rose.