Tesla is shedding hundreds of staff because it tries to concurrently reduce prices and enhance productiveness, in accordance with an inside electronic mail despatched to employees by CEO Elon Musk, Electrek and Bloomberg News reported. Drew Baglino, one of many firm’s highest-ranking executives, has additionally left the corporate, in accordance with Bloomberg.
The electrical automaker is chopping “greater than 10%” of its world headcount, Musk stated within the electronic mail. Tesla completed 2023 with over 140,000 employees, which means the cuts may affect greater than 14,000 folks.
The layoffs come simply two weeks after Tesla reported its first year-over-year drop in sales in three years, amid a wider cooling of demand for EVs. The corporate has warned buyers that gross sales development could possibly be “notably decrease” in 2024 than its said purpose of fifty% development annually. It’s additionally considerably in between product cycles for the primary time in years, with the costly Cybertruck solely only in the near past going into manufacturing and the favored Mannequin Y coming into its fourth yr with none important updates.
“As we put together the corporate for our subsequent part of development, this can be very vital to have a look at each side of the corporate for price reductions and growing productiveness,” Musk stated within the electronic mail. Tesla’s development, he stated, has led to “duplication of roles and job capabilities in sure areas.”
“As a part of this effort, we have now completed a radical evaluation of the group and made the troublesome determination to scale back our headcount by greater than 10% globally. There’s nothing I hate extra, nevertheless it should be completed. It will allow us to be lean, modern and hungry for the subsequent development part cycle,” Musk wrote.
Baglino’s departure is the second time a prime govt has left the corporate previously yr, as Tesla CFO Zachary Kirkhorn stepped down in August 2023. Baglino oversaw engineering for the corporate’s powertrain and battery applied sciences. He additionally had develop into one of many extra responsive executives on Musk’s social media platform, X.
Tesla shipped a record 1.8 million EVs in 2023. However the firm spent a lot of the yr slashing costs on its hottest fashions in an effort to counterbalance the affect of excessive rates of interest and elevated world competitors. The corporate has additionally reportedly dropped — or on the very least, delayed — plans to construct a lower-cost EV that will retail beginning at round $25,000, opting as a substitute to make use of the underlying platform being developed to energy an alleged robotaxi that Musk stated will debut on August 8.
This story and headline have been up to date to incorporate information of Drew Baglino’s departure.
