Tesla cuts workforce by more than 10% – report

The report points out Tesla is preparing to cut 15,000 workers worldwide as it “leans, innovates and aspires to the next growth cycle.”

In a memo obtained by Electricity And Reuters“As we prepare the company for its next phase of growth, it is critically important to look at every aspect of the company to reduce costs,” CEO Elon Musk told Tesla employees. and increase productivity.

“As part of this effort, we took a hard look at our organization and made the difficult decision to reduce our global headcount by more than 10%.

Automotive news It is known that Tesla will lay off 15,000 people. According to the annual report, at the end of 2023, the company had 140,473 employees.

It’s unclear which parts of the company will see the largest number of staff cuts, but Electricity noted that Drew Baglino, the company’s head of powertrain and energy, and Rohan Patel, Tesla’s policy president, both have “affiliated with Tesla” badges on their Twitter profiles – sorry, X -.

Source said Reuters Some employees in California and Texas have been notified of their layoffs.

For years, Tesla’s sales have continued to grow along with its profit margins, allowing the market valuation of Tesla’s stock to far exceed that of traditional automakers. However, in recent quarters, as demand for electric vehicles cooled, the company has continuously reduced prices to maintain sales momentum.

This tactic seems Stopped working in the first quarter of 2024 when production exceeded deliveries by 46,651. With 386,810 vehicles sold globally, down 8.5% year-on-year, this past quarter was the first time since July to September 2022 that Tesla’s sales were below 400,000 units.

The price cuts also affected the company’s profit margins as the company reported a gross profit margin per vehicle of 17.6% at the end of last year. While that number is still high – mass-market automakers typically have target margins between 8 and 10% – 17.6% is the lowest reported by Tesla in four years.

Not only after releasing disappointing sales figures, Reuters reported Tesla canceled development of a more affordable model.

The new car, commonly known as the Model 2, is priced from $US25,000 ($38,700). The vehicle will replace the discontinued Chevrolet Bolt in the US, while countering the rise of affordable electric vehicles from Chinese and European automakers.

Mr. Musk denied the report, writing on Twitter that “Reuters lies (again),” while Franz von Holzhausen, Tesla’s chief designer, told a discussion panel to “stay tuned” and “don’t always believe what you read”.

With Model S sedans and Model X crossover is only produced in limited numbers and only in left-hand drive form, Tesla relies heavily on the smaller model Model 3 sedans and Model Y cross.

Launched in 2017, the Model 3 recently received its first facelift, while the Model Y, which began production in 2020, is still waiting for its first major change.

The outspoken Tesla CEO then took to his social media platform to announce that the company will launch a robotaxi on August 8, US time. It’s unclear how close robotaxi is to production, testing or revenue services.

Regulators in California, Arizona and Nevada have made announcements NBC News Tesla is yet to submit the necessary licenses and the automaker has not yet contacted the relevant authorities about initiating the process.