Well, it looks like Tesla is actually in trouble if its laying off so many staff members
Tesla is laying off more than 10 percent 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 (EVs). Looks like the brand is in trouble now.
Tesla CEO Elon Musk commented in a post on X, stating, “About every five years, we need to reorganise and streamline the company for the next phase of growth.” Two senior leaders, battery development chief Drew Baglino and vice president for public policy Rohan Patel, also announced their departures, leading to some investors becoming concerned.
Moreover, Musk last announced a round of job cuts in 2022, after telling executives he had a “super bad feeling” about the economy. Still, Tesla headcount has risen from around 100,000 in late 2021 to over 140,000 in late 2023, according to filings with U.S. regulators.
Baglino was a Tesla veteran and one of four members, along with Musk, of the leadership team listed on the company’s investor relations website.
On top of that, Scott Acheychek, CEO of Rex Shares, which manages ETFs with high exposure to Tesla stock, described the headcount reductions as strategic, but Michael Ashley Schulman, chief investment officer at Running Point Capital Advisors, deemed the departures of the senior executives as “the larger negative signal today,” that Tesla’s growth was in trouble.
Less than a year ago, Tesla’s chief financial officer, Zach Kirkhorn, left the company, fueling concerns about succession planning. The brand’s shares closed 5.6 percent lower at USD161.48 (about RM771.72) on Monday. Shares of EV makers Rivian Automotive, Lucid Group and VinFast Auto also dropped between 2.4 percent and 9.4 percent.
What’s more, Musk also said in the memo sent to all Tesla staff. “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.”
“As part of this effort, we have done a thorough review of the organisation and made the difficult decision to reduce our headcount by more than 10% globally.” it said. Reuters also saw an email sent to at least three U.S. employees notifying them their dismissal was effective immediately. Tesla did not immediately respond to a request for comment.
We got all this from Reuters and their full article is linked here. Thank you Reuters for the information and images.
