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Tesla is laying off more than 10% of its workforce, memo shows

Grace Kay,Jyoti Mann   

Tesla is laying off more than 10% of its workforce, memo shows
  • Tesla is reducing its workforce by more than 10%, per an internal memo seen by Business Insider.
  • Earlier this month, Tesla's delivery numbers slumped below Wall Street expectations.

Tesla is the latest major company to lay off employees.

The company is eliminating "more than 10%" of staff globally, according to an internal memo sent by Elon Musk on Sunday, which was seen by Business Insider. The layoffs have come shortly after the carmaker posted lackluster delivery numbers.

Musk wrote in the email: "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 cycle."

Some Tesla employees lost access to their emails and Teams by Monday, two people with knowledge of the matter said.

Tesla's first-quarter delivery numbers disclosed a significant slump — falling below Wall Street's estimates. Tesla deliveries in the first quarter fell 20% from the previous quarter and more than 8% from the same time the previous year, marking the company's first year-on-year sales decline since 2020.

In a press release, Tesla blamed the decline in deliveries on its production ramp for its refreshed Model 3, an arson attack at its factory near Berlin, and supply-chain issues caused by the Red Sea conflict.

There have been rumors in recent months of a coming layoff. In February, Bloomberg reported that the carmaker called for managers to begin identifying the most vital roles for the company. At the time, Tesla also delayed some workers' performance reviews, Bloomberg reported. The reviews were later rescheduled, three sources told BI.

A spokesperson for Tesla didn't immediately respond to a request for comment.

Before the layoffs, Tesla said it employed more than 140,000 workers globally, including over 20,000 at its Fremont factory in California.

Tesla CEO Elon Musk has a history of reducing staff to cut costs. The billionaire famously cut Twitter's workforce in half after he purchased the company in 2022. And Tesla has conducted several rounds of layoffs before.

Last year, Tesla laid off dozens of its employees working on its Autopilot service at one of its sites in Buffalo, New York. At the time, the company said the terminations had nothing to do with a union campaign at the facility that had been announced the week before. The company said it dismissed the employees for poor performance.

Tesla appeared to slow down its hiring last year. Musk told staff in May that he must personally approve all new Tesla hires.

During Tesla's earnings call in January, Musk warned of a sales slowdown in 2024 and said the company was "between two major growth waves."

Over the past year, the automaker has continually slashed prices for its vehicles and tried its hand at advertising for the first time in the company's history. Tesla is also facing increased competition from Chinese automakers.

Musk has also warned that Tesla could face production hurdles in the coming year as it tries to ramp up production of the Cybertruck and Tesla's next-gen vehicle platform.

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