Less than two weeks after Tesla announced its first year-over-year delivery drop since 2020, CEO Elon Musk sent an internal email to staff stating that the company would cut at least 10% of its global workforce.
Musk’s memo, sent at close to midnight PST on Sunday in California, explained that “there has been duplication of roles and job functions in certain areas” and that the layoffs would happen “for cost reductions and increasing productivity.”
Tesla executives, including senior vice president Drew Bagliano and policy chair Rohan Patel, also announced on Monday that they were leaving the company. Patel told TechCrunch that he chose to leave because of “[b]ig overall changes” at Tesla.
Elon Musk, owner of Tesla and the X (formerly Twitter) platform. Photo by Beata Zawrzel/NurPhoto via Getty Images
Tesla employees shared rumors of layoffs as high as 20% with Electrek on Sunday.
Musk’s email confirmed that the percentage was “more than 10%” without specifically stating how many employees will be affected.
Tesla had 140,473 employees globally as of December 31, according to its 2023 annual report, meaning that at least 14,000 people will be impacted.
Related: Tesla Sales, Deliveries Drop for First Time Since 2020
Bloomberg reported in February that Tesla asked managers if each of their employees’ jobs were critical to the company, sparking layoff fears. Tesla also decided not to give merit-based stock bonuses last year.
Tesla last laid off 27 employees in Buffalo, New York in February 2023.
Related: ‘Next Tesla’ Electric Car Startups Hit Speed Bump: ‘Investors Want To See Demand’
The layoffs follow Tesla’s report in early April that deliveries declined 8.5% year-over-year because of factors like factory shutdowns. Lower-than-expected demand may have also played a role.
Earlier this month, Musk claimed that the Tesla Robotaxi, an autonomous, new offering from Tesla, will be unveiled in August.
Tesla is set to post its financial results for Q1 2024 on April 23.
Related: Elon Musk Reveals When Tesla Will Release Its First Robotaxi
Several news outlets, including Electrek, Reuters, and Business Insider viewed the memo.
Here’s the full internal email about Tesla layoffs, obtained by Business Insider on Monday:
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.
Thanks,
Elon
