Tesla Lays Off More Than 10% of Its Global Workforce In Response to Slowing Sales, Fierce Competition

The 14,000-plus wave of layoffs take effect immediately

The shifting EV landscape is ratcheting up pressure on Tesla as it aims to stay competitive.

Tesla CEO Elon Musk took to X (formerly Twitter) to address the company’s announcement Monday that it would lay off 10% or more of its 144,000-strong workforce amid slipping sales volumes and intense competition in the electric car market. “About every five years, we need to reorganize and streamline this company for the next phase of growth.” Today’s news comes after the automaker has expanded its headcount from around 100,000 in 2021 to more than 140,000 in late 2023, with an unspecified amount of job reductions in the middle, in 2022.

Information shared with Reuters revealed today’s lay offs take effect immediately. Electrek also shared Musk’s email in its entirety, and noted reports that some employees were already locked out of system access, as of Monday morning.

In the wake of Monday’s layoffs, two high-profile executive departures include Senior Vice President of Powertrain and Energy Drew Baglino and business development head Rohan Patel.

Tesla will deliver its quarterly earnings report next Tuesday, April 23. Even before that, though, we know the company’s recent fortunes have been rough. Not only did it miss its delivery estimates for the first three months of 2024, but it’s also facing increasingly stiff competition from “legacy” automakers as well as Chinese firms, the latter of which are quickly ramping up production and planning a broader onslaught throughout several global markets. Tesla also reportedly pivoted away from developing a low-cost Model 2 (though Musk denied it scrapped the project entirely), instead opting to pour resources into its robotaxi, which is set to debut on August 8.

The company is hardly alone in slimming down its payroll — brutal waves of layoffs have impacted the tech industry over the past several months, including dismissals at Apple as it abandoned its own car project. Analysts expect Tesla will still report a profit of around 50 cents per share next week, though we will ultimately have to see what effect a 10% reduction has on both the company’s current output and its development of next-generation product moving forward. It’s also unclear, for the moment, how employees who survived this round of layoffs will react, as they now face increased pressure as Musk focuses on “increasing productivity” while curbing costs.

Musk’s email to employees

For better context, here is the full text of Musk’s company-wide email announcing the layoffs:

Over the years, we have grown rapidly with multiple factories scaling around the globe. With this rapid growth there has been duplication of roles and job functions in certain areas. 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. 

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. This will enable us to be lean, innovative and hungry for the next growth phase cycle.

I would like to thank everyone who is departing Tesla for their hard work over the years. I’m deeply grateful for your many contributions to our mission and we wish you well in your future opportunities. It is very difficult to say goodbye.

For those remaining, I would like to thank you in advance for the difficult job that remains ahead. We are developing some of the most revolutionary technologies in auto, energy and artificial intelligence. As we prepare the company for the next phase of growth, your resolve will make a huge difference in getting us there.