Elon Musk Announces Tesla to Lay Off Over 10% of Workforce

Tesla faces scrutiny over recent workforce reductions.

by Nouman Rasool
Elon Musk Announces Tesla to Lay Off Over 10% of Workforce
© Kevin Winter/Getty Images

Tesla CEO Elon Musk has reportedly announced a massive reduction of the company's workforce, mentioning overstaffing and duplication of roles in a rapidly growing electric vehicle (EV) company. The company had claimed in a prepared memo for internal circulation among its staff on Sunday night that more than 10% of its employees worldwide were likely to be sacked.

Business Insider has obtained a look at a memo on this critical but necessary step toward efficiency and driving innovation in future growth. This communication from Musk greatly stunned many, more so the affected employees who were being given their notices separately through their private emails.

The messages are such that they openly tell that the services are no longer required, and hence, in the future, the systems and premises of Tesla will be denied. The latest case of Tesla taking increasingly decisive action to raise efficiency and reduce costs—all in preparation for its next phase of expansion.

Layoffs Amid Union Tensions

The job cuts follow a weekend of speculative discussions by Tesla staff, fueled by rumors of impending layoffs.The reports indicate that some of these managers were previously asked to give the identities of roles that were to be terminated and in a move that seemed to have culminated in this mass culling.

The layoffs are not unprecedented, with similar cuts being made by Tesla at its Buffalo, New York, facility this past January. These layoffs seem to be just what Working United claims the firings were, actually a retaliation over unionising efforts—a claim that Tesla has denied.

The latest round of layoffs coincided with a troubling dip in Tesla's stock price. The stock was down 1.2% in premarket trading after the announcement. The stock has taken a huge hit now, down over 31% year-to-date amid slowing demand for Tesla's electric vehicles.

Remarkably, the layoffs come one day before Tesla reports its latest quarterly earnings on April 23. The investors and industry analysts have highly eyed this report in order to measure the financial health and future prospects of the EV giant.

In the memo, Musk lamented the layoffs and at the same time thanked the departing employees for the contribution and dedication made to the mission of Tesla. He also recognized the greatness of the challenges that still remain in the hand of the still-working staff and the big part they are going to play in Tesla's pursuit of ground-breaking innovations in automotive technology, energy solutions, and artificial intelligence.

Elon Musk