Tesla to lay off more than 10 percent of staff worldwide amid falling sales

CEO Elon Musk says in memo that job cuts will leave firm ‘lean, innovative and hungry for the next growth phase cycle’.

Tesla's vehicle deliveries fell sharply in the first quarter of this year [Paul Lienert/Reuters]

Electric carmaker Tesla plans to lay off more than 10 percent of its global workforce, according to a memo sent to employees by CEO Elon Musk.

Musk told staff in an email on Monday that the cuts were necessary due to the “duplication of roles and job functions in certain areas”, which had followed the company’s rapid global expansion.

“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,” Musk said in the memo obtained by multiple media outlets.

“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 per cent globally. There is nothing I hate more, but it must be done. This will enable us to be lean, innovative and hungry for the next growth phase cycle.”

Musk thanked the remaining staff for the “difficult job that remains ahead” as the company worked to develop “revolutionary technologies in auto, energy and artificial intelligence”.

In a post on X after the news became public, Musk said that Tesla needed to “reorganise and streamline the company for the next phase of growth” about every five years.

Electrek, a media outlet focused on electric transportation and sustainable energy, first reported the layoffs.

The announcement comes less than two weeks after Tesla reported that vehicle deliveries fell by 8.5 percent in the first quarter, the first year-over-year drop since 2020.

Tesla’s disappointing results followed supply chain disruptions caused by Houthi attacks on shipping in the Red Sea and an arson attack by environmental activists at a production facility in Germany.

In a further sign of upheaval at the company, two senior executives announced their departure on social media.

Andrew Baglino, the senior vice president of powertrain and energy engineering, said on X that he had made the “difficult decision to move on from Tesla after 18 years”.

“I am so thankful to have worked with and learned from the countless incredibly talented people at Tesla over the years,” Baglino said.

Rohan Patel, the senior global director of public policy and business development, also said he would be leaving the company after eight years.

Tesla shares fell by more than 5 percent on Monday, continuing a downward streak which has seen the stock lose about one-third of its value so far this year.

Source: Al Jazeera and news agencies