Tesla plans to lay off more than 10 percent of its workforce in an effort to cut costs, Elon Musk, the automaker's chief executive, told employees on Monday. The job cuts, amounting to about 14,000 people, come as the company faces increasing competition and declining sales.
“As we prepare the company for the next phase of growth, it is extremely important to examine all aspects of the company to reduce costs and increase productivity,” Musk told employees in an email, a copy of which was reviewed by The New York Times.
“There is nothing I hate more, but it has to be done,” he wrote.
The email was previously reported by Electrek, an online news site, and Handelsblatt, a German business newspaper.
The move is the latest sign that Tesla may not be as unstoppable as it seemed. The company's sales are no longer growing at a rapid pace and the introduction of new models has been slow. Automakers in Asia and Europe have been flooding the market with electric cars.
Musk's many other ventures and his penchant for making polarizing political statements have raised questions about how focused he remains on managing Tesla. Wall Street is increasingly concerned about the company: Tesla's share price has lost about a third of its value this year.
This month, Tesla reported a drop in sales that took investors by surprise. The company said it delivered 387,000 cars worldwide in the first quarter, down 8.5 percent from a year earlier. It was the first time Tesla's quarterly sales fell year-over-year since the start of the pandemic in 2020.
The company significantly reduced prices throughout 2023 to increase demand, which has reduced the profits Tesla makes on each car. But that strategy appears to be losing effectiveness.
Rivals such as China's BYD, Germany's BMW and South Korea's Kia and Hyundai reported increases in electric vehicle sales during the same period, suggesting that overall lower demand for battery-powered models was not the only explanation. of Tesla's problems.
Many of Tesla's workers work at four large auto factories in Fremont, California, Austin, Texas, Shanghai or near Berlin.
