Tesla Slashes 10% of Global Workforce, Informs Employees Via Email
Tesla has laid off 10% of its global workforce. Elon Musk, the company's CEO, emailed the employees with this information on Monday morning, per The Washington Post. Residents in the Austin region, where Tesla employs over 20,000 people at its Gigafactory, are impacted by this news. Tesla has more than 140,000 employees worldwide.
Employee concerns and impact
"I got an email saying I was let go, and they decided to cut 10% of the workers," Ezkel Love, an employee, said. "They're supposed to be all about innovation...That job was my chance to learn manufacturing."
Love was hired just a month ago to help put together Tesla Model Y cars at the plant near Del Valle. His termination notice mentioned reduction of staff at the Austin factory, but Musk's email to employees said the layoffs would happen worldwide. The letter explained Tesla was cutting jobs because the company had grown too fast.
"No heads-up at all. Now I'm out of work. Can't pay my rent. So, I've got to find something else to do to get by," Love said. While Love was caught off guard, Fred Lambert, the Editor-in-Chief at Electrek said they'd been hearing rumors about this for months.
"Since December," Lambert said. "More in January and February, when Tesla held off on some performance reviews, lowered some pay, and took away stock options... Signs that layoffs might be coming."
Tesla says the layoffs might be because they hired too many people, but Lambert thinks there could be more reasons like how the company did last quarter. While electric car sales are still good worldwide, Tesla had a rough first quarter this year. "There should have been tens of thousands of vehicles sold that weren't. That's a concern for Tesla investors," Lambert said.
Lambert also mentioned that Tesla's plans for its next-gen electric cars which were supposed to be affordable, got delayed because of the Cybertruck. That means Tesla isn't growing like it should, and the layoffs might be a way to make up for lost money.
Employees think Tesla May lose more money in Q2
Lambert said Tesla might end up losing money for the first time in years. "They're trying to avoid that happening in Q2 if they keep delivering vehicles at the same rate," Lambert said. While Tesla is still growing and hiring more people, folks like Love are getting left behind. "They should let us know what's really going on with the company instead of hiring a bunch of us and then letting us go," Love said.
Love mentioned he hasn't been able to reach out to the human resources department for a clear explanation of what happened. He's also worried about how this will affect people with kids and those who travel long distances to work at Giga Texas.
Further developments and numbers
Certain workers in Texas and California have reportedly already been informed about the impending layoffs, according to a Reuters story. How these layoffs will impact Tesla's operations in Central Texas is yet unknown. By the end of 2023, Tesla employed over 140,473 people worldwide. Musk's message did not state how many jobs would be impacted by the proposed layoffs although a 10% decrease would likely touch 14,000 workers.
Musk's memo, which says that the layoffs are required to eliminate overlapping responsibilities and job tasks in specific areas, is available in Electrek's report. These overlaps resulted from Tesla's rapid growth. Musk expressed his dislike for layoffs but said they are necessary for Tesla to become more efficient, innovative, and ready for the next phase of growth.
