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    Innovation Village | Technology, Product Reviews, Business
    You are at:Home»Automobiles»Tesla to Lay Off Over 10% of Global Workforce Amidst Sales Decline
    Elon Musk Tesla
    Tesla CEO Elon Musk

    Tesla to Lay Off Over 10% of Global Workforce Amidst Sales Decline

    0
    By Staff Writer on April 15, 2024 Automobiles

    Tesla, the pioneering electric vehicle (EV) manufacturer, is undergoing significant restructuring, according to an internal memo obtained by Reuters on Monday. The memo revealed plans to lay off more than 10% of its global workforce as the company grapples with declining sales and heightened competition in the EV market.

    CEO Elon Musk commented on the restructuring, stating, “About every five years, we need to reorganize and streamline the company for the next phase of growth.” This move comes as Tesla faces challenges in maintaining its market position amidst increasing pressure from competitors and changing market dynamics.

    The memo also disclosed the departure of two senior leaders, battery development chief Drew Baglino and vice president for public policy Rohan Patel. Musk expressed gratitude for their contributions but investors expressed concern over the implications of their exits.

    This is not the first time Tesla has implemented job cuts under Musk’s leadership. In 2022, Musk announced similar measures, citing economic concerns. However, despite these reductions, Tesla’s headcount has grown from around 100,000 in late 2021 to over 140,000 in late 2023, according to filings with U.S. regulators.

    Baglino, a Tesla veteran, played a crucial role in the company’s leadership team and was instrumental in its battery development efforts. The departures of such key executives raise questions about Tesla’s future growth prospects and succession planning.

    Investors have responded to the news with caution, with Tesla’s shares declining by 5% to $162.42 late on Monday. Similarly, shares of other EV makers, including Rivian Automotive, Lucid Group, and VinFast Auto, also experienced downward pressure, trading between 2.2% and 10.7% lower.

    In his memo to staff, Musk emphasized the need for cost reductions and increased productivity to prepare the company for its next phase of growth. He stated, “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.”

    While Tesla aims to streamline its operations and optimize efficiency, Bloomberg reported that cuts of closer to 20% could occur in some divisions. Reuters also obtained an email sent to at least three U.S. employees, notifying them of their immediate dismissal.

    The restructuring at Tesla underscores the challenges facing the company as it navigates a rapidly evolving EV landscape. With competition intensifying and market conditions evolving, Tesla is taking strategic measures to position itself for future success amidst a changing automotive industry.

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