The push towards electrics means changes in the automotive industry are impacting every OEM – even those tailor made for it.
Elektrek first reported that EV leader Tesla is cutting “more than 10%” of its workers. Citing an internal memo, the company is reportedly looking at “cost reductions and increasing productivity” and will target its global workforce. While no hard number was released, 10% of Tesla’s worldwide staff would amount to 14,000 job cuts or more.
Elektrek says the writing has been on the wall, and their sources said - in the weeks leading up to the memo - managers were being asked to identify their critical team members. The company also paused some bonuses and canceled performance reviews while also cutting production at its plant in China.
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Musk’s email memo also suggests that the company’s rapid scale led to redundancies in Tesla’s workforce, though experts believe there is more to the story – including Tesla’s slow rollout of new models, lower delivery volumes and multiple price cuts impacting its profit margin.
From a market standpoint, Reuters cites Craig Irwin, a research analyst at Roth Capital, who said that the layoffs indicate that Tesla believes weak growth in the EV sector will continue.
Tesla has faced a rash of other problems in recent weeks, including settling a lawsuit filed by the family of a man who was killed in a crash while allegedly using Tesla’s Autopilot autonomous driving system. Not to mention, the automaker’s stock has dropped some 30% so far this year after a delivery slowdown, amid recurring problems with the company’s long-anticipated Cyber Truck.
In the memo, CEO Musk says there is “nothing [he] hates more” than having to lay off staff, but that leaning out the organization will enable Tesla to be “innovative and hungry for the next growth phase cycle.”
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