Tesla cuts 10% of its workforce

Tesla plans to cut more than 10% of its global workforce, CEO Elon Musk said in a memo to employees on Monday.

“Over the years, we have grown rapidly with several expanding factories around the world,” Musk said in the memo. obtained by CNBC. “With this rapid growth, there has been a duplication of roles and roles in certain areas.”

“As we prepare the company for our next phase of growth, it is extremely important to look at all aspects of the company to reduce costs and increase productivity,” he added.

The cuts will likely affect about 14,000 employees, based on the electric vehicle company’s worldwide headcount of 140,473 at the end of December.

“There is nothing I hate more, but it must be done,” Musk said in Monday’s memo. “This will allow us to be lean, innovative and eager for the next cycle of the growth phase.”

Tesla reported a decline in vehicle deliveries in the first quarter of 2024. The EV company delivered 386,810 vehicles between January and March, an 8.5% drop from the same period last year.

He said the decline in deliveries was partly due to factory closures amid shipping difficulties in the Red Sea and a factory in Germany that lost power after an arson attack.

The EV company also faces increasing competition from Chinese EV manufacturer BYD, which surpassed Tesla in global sales in the fourth quarter of 2023. However, Tesla regained the title in the first quarter of this year.