Tesla to cut over 10% of workforce in global retrenchment

By Ed Ludlow and Dana Hull | Bloomberg

Tesla Inc. is slashing headcount by more than 10%, part of a global retrenchment extending all the way into its executive ranks as the carmaker struggles with slowing demand for electric vehicles.

Chief Executive Officer Elon Musk revealed the job cuts in an email to staff, citing duplication of roles and the need to reduce costs. If the dismissals apply companywide, they would amount to more than 14,000 employees.

Alongside the layoffs, Senior Vice President Drew Baglino and Rohan Patel, vice president of public policy and business development, have departed, according to people familiar with the matter who asked not to be identified because the information is private. Baglino, an 18-year company veteran who was one of just four named executive officers, resigned from the company, one of the people said.

Tesla reported vehicle deliveries early this month that missed expectations by a wide margin, posting its first quarterly decline in four years. Several analysts are bracing for the EV maker’s sales to potentially shrink for the year, citing slow output of its newest model — the Cybertruck — and a lull in new products until the company starts producing a next-generation vehicle late next year.

“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 wrote in the memo, which was seen by Bloomberg News. “As part of this effort, we have done a thorough review of the organization and made the difficult decision to reduce our headcount by more than 10% globally. There is nothing I hate more, but it must be done.”

Tesla ended last year with 140,473 employees, almost double its total three years earlier. It’s been ramping up output at two plants — one in Austin, and the other outside Berlin — that started cranking out Model Y sport utility vehicles in early 2022. The company started slashing prices across its lineup as those facilities reached higher volumes.

“Over the years, we have grown rapidly with multiple factories scaling around the globe,” Musk wrote in the email, which was reported earlier Monday by the blog Electrek. “With this rapid growth there has been duplication of roles and job functions in certain areas.”