Elon Musk, the billionaire business magnate, has taken the tough decision to lay off 10 percent of Tesla’s worldwide workforce, totaling 140,000 employees.
The move comes as Tesla grapples with declining revenue, hefty operational expenses, and sluggish demand for electric vehicles (EVs).
According to reports from Bloomberg, a renowned British business publication, Musk communicated the layoffs via mass emails sent late Sunday. In his message, Musk acknowledged the challenging nature of the decision, stating that it was a necessary step that “must be done.”
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“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,” Bloomberg cited Mr Musk as writing in the email.
“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 per cent globally,” the Tesla CEO added. “There is nothing I hate more, but it must be done.”
The immediate implementation of the dismissal means that at least 14,000 Tesla employees across various countries will be facing job losses.
Already, Andrew Baglino, who held the position of Tesla’s senior vice president for battery development until Sunday, publicly disclosed his termination on X platform. This move garnered a response from Mr. Musk.
“I made the difficult decision to move on from Tesla after 18 years yesterday,” Mr Baglino said. “I will always have a warm spot for the people of Tesla and Tesla products in my heart and wish the team and company the best in the future.”
In response, Mr Musk wrote, “Thanks for everything you’ve done for Tesla. Few have contributed as much as you.”
But analysts said the large layoffs were “ominous” and hinted at a much deeper challenge than Tesla was letting on.
“It’s an ominous sign of some dark days ahead,” LA Times cited Dan Ives, Wedbush Securities’ managing director as saying. “Streamlining is one thing, but the size of this cut is a concern for a company that’s still in growth mode.”
