Tesla To Lay Off 285 Workers In Buffalo As Part Of Its Global Restructuring Plan

EV automaker Tesla is set to lay off 285 employees or 14% of its workforce in Buffalo, New York as part of a broader restructuring plan. According to a WARN notice filed in the state on Wednesday, the company said the layoffs necessited due to "economic" reasons would start from July 15. The two impacted sites have about 2,032 employees, according to Reuters. Most of the affected workers served at the factory while a handful worked at a store and service center in the area.

The notice was issued under the Worker Adjustment and Retraining Notification (WARN) Act under which employers are required to provide a 60-day notice to workers before layoffs.

The news comes after Tesla announced that it would lay off about 10% of its global workforce. Citing an internal memo, Reuters earlier reported that the company was facing pressure from falling sales and price war for EVs. Tesla’s global workforce totaled around 140,000 employees at the end of 2023.

So far, few details have been shared by the company or CEO Elon Musk about the layoffs. However, in the memo, Musk said the layoffs would help, “prepare the company” for the “next phase of growth.”

Tesla’s Shifting Plans and Musk’s Stand

Earlier this month, Reuters reported that Tesla has scrapped its plan to make an affordable EV that would cost about $25,000. The company is shifting its strategy to focus on its robotaxi development, Musk appeared to confirm that in a post on X.

On the other hand, Musk hasn’t said anything on whether Tesla will stick with his 2023 “master plan,” which laid out a path to reach a sustainable global energy economy through end-use electrification. However, on the 10% workforce layoffs, and the departure of two senior leaders, Drew Baglino and Rohan Patel, Musk did comment that it was part of the restructuring efforts.  

"About every five years, we need to reorganize and streamline the company for the next phase of growth," Musk said on Twitter.

Baglino served as the battery development chief while Pater was the vice president for public policy. Their departure also drew posts of thanks from Musk while sparking concerns among investors.

However, shareholders and the board of Tesla seem to have full faith in Musk and his leadership. In a proxy filing out on Wednesday, the shareholders of Tesla made a request to approve a CEO pay package for Musk that’s equivalent to the record compensation plan which was granted to him in 2018.

The plan worth $56 billion was voided in a ruling by Delaware chancery court judge who stated decided that, as CEO, Musk controlled Tesla, and the board’s compensation committee wasn’t independent.

Recent Layoffs at Tesla

Last year in February, the EV maker laid off about 4% of the employees in the Autopilot labeling team in Buffalo as part of a performance review cycle which is conducted every six months.

The last big round of job cuts at Tesla was announced in 2022, after Musk told executives he had a "super bad feeling" about the economy. Despite the layoffs in this period, the company’s headcount rose from about 100,000 in late 2021 to over 140,000in late 2023, according to filings with U.S. regulators.