Tesla intends to cut its global workforce by more than 10% as electric vehicle demand experiences a slowdown, reported multiple sources.
The US and China markets will feel the most significant impact of this development. The two key markets of the EV manufacturer will see workforce reductions in sales, tech, and engineering roles.
According to an internal memo obtained by Reuters, Elon Musk informed employees on Monday that the company will cut more than 10% of its global staff amidst declining sales and growing competition over EV pricing.
Musk stated, “There’s nothing I despise more, but it’s imperative.” As per AFP, Musk added, “This will empower us to be nimble, inventive, and hungry for the next stage of growth.”
Job Cuts in the US
The Majority of job cuts identified by top management in the ongoing wave of layoffs will promptly take effect across multiple US-based service centres.
A source revealed to Reuters that most layoffs occurred in sales and tech departments. On the other hand, one US-based site terminated its entire front-of-house staff.
In addition to those in sales and tech, the company have asked numerous engineers to resign.
As per a spreadsheet shared on LinkedIn by a Tesla program manager in California, nearly 140 laid-off employees, predominantly engineers, are searching for their next job.
Job Cuts in China
Reuters reported that several teams operating in China have received notification to execute the layoff order. Moreover, the company notified Tesla’s China sales team about the redundancy. A source revealed to Reuters that more than 10% of the team’s employees have been removed from their positions.
As per reports, Tesla’s layoff will have a minimal impact on its Shanghai plant, as the company plans to terminate only a few employees.
As of now, the company has not issued an official statement regarding the impact of the layoffs on various markets.
Tesla’s Vehicle Deliveries
The Chinese market poses fierce competition for Tesla as it grapples with a pricing rivalry led by competitors, primarily BYD. Moreover, there is a slowdown in United States sales and significant investment expenses in new models and AI.
The reports of layoffs come after Tesla’s disappointing vehicle deliveries earlier this month, falling significantly short of expectations.
The EV giant registered its first quarterly decline in four years. It led experts to speculate that the EV maker’s sales might decline due to reduced production of its latest model, the Cybertruck.
