Tesla, the leading electric vehicle manufacturer, has announced plans to lay off more than 10 percent of its global workforce, according to an internal email sent to staff by CEO Elon Musk, as reported by Electrek, a US news portal dedicated to electric transportation and sustainable energy. The decision to reduce the company’s headcount comes amidst a slowdown in electric vehicle demand and follows a difficult start to the year for the electric carmaker.
In the internal memo, Musk explained that the layoffs were necessary due to “rapid growth” that has led to “duplication of roles and job functions in certain areas.” He expressed his reluctance to make such cuts, stating, “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.” As of December 2023, Tesla had 140,473 employees globally, according to its latest annual report, meaning that the layoffs could affect at least 14,000 roles.
The announcement comes just 10 days after Tesla reported a drop in first-quarter auto deliveries. The company stated that it had made approximately 387,000 deliveries to customers in the first quarter of 2024, falling short of market expectations by about 13%. This marked Tesla’s first fall in deliveries in nearly four years. While the company cited production problems caused by unforeseen factors such as attacks on shipping in the Red Sea and an arson attack on its European factory, the figures also pointed to a softening in global demand.
Musk dismissed comments suggesting that his divisive persona had caused a downturn in sales, pointing to similarly poor figures from the Chinese rival BYD and stating that it was a “tough quarter for everyone.” Tesla has manufacturing sites in California, Nevada, Texas, and New York in the US, as well as plants in Germany and China.
In a separate development, Reuters reported that BP had cut more than a tenth of the workforce in its electric vehicle charging business, Pulse, representing more than 100 jobs. The company has also pulled out of several markets after a bet on rapid growth in commercial electric vehicle fleets did not pay off. BP stated that the changes at its Pulse unit were “a step towards ensuring that we can execute our goals with even greater precision and effectiveness.”
The layoffs at Tesla and BP’s Pulse unit highlight the challenges faced by companies in the electric vehicle industry as they navigate a rapidly evolving market and shifting consumer demand. As the sector continues to mature, companies will need to remain agile and adapt their strategies to ensure long-term success.
