Tesla lays off more than 10% of its workforce

Tesla will lay off more than 10% of its global electric vehicle workforce.

In a memo, first reported by news site Electrek, billionaire owner Elon Musk told his staff there was nothing he hated more, “but it has to be done.”

The world’s largest automaker by market value had 140,473 employees worldwide as of December, according to its latest annual report.

Tesla did not respond to the BBC’s request for comment.

“We have conducted a thorough review of the organization and made the difficult decision to reduce our workforce by more than 10% globally,” Mr. Musk’s email said.

“There’s nothing I hate more, but it has to be done. It will keep us lean, innovative and hungry for the next growth cycle.”

A Tesla employee who was told of his layoff told the BBC that he was subsequently excluded from emails, as were all other staff members who had been let go.

One of the members of the management team, Andrew “Drew” Baglino, said in a post on X (formerly Twitter) on Monday that he had made the “difficult decision” to leave the company after 18 years.

Another head of public policy and business development, Rohan Patel, is also expected to leave.

He personally thanked Mr. Musk for giving him the chance and “empowering” him to lead major initiatives within the company.

He also said that the “never say, die attitude” of the Tesla team as a whole is what he believes makes it a special place to work.

Their departures “signify that Tesla’s major phase of growth is facing serious headwinds,” said Michael Ashley Schulman, chief investment officer at Running Point Capital Advisors, calling it “the most important negative signal today” that the announcement of job cuts.

However, analysts at Gartner and Hargreaves Lansdown said the cuts were a sign of cost pressures as the automaker invested in new models and artificial intelligence.

The electric vehicle (EV) maker has been slow to refresh its aging models as high interest rates have sapped consumers’ appetite for big-ticket items.

The company is expected to report quarterly results later this month, but has already reported a drop in vehicle deliveries in the first quarter, the first in almost four years and also below market expectations. Some analysts described the results as “tumultuous.”

Last month, Tesla reduced production at the Shanghai Gigafactory, and last week, Tesla told employees who work on the Cybertruck that shifts would be shorter at the Austin production line.

Tesla has started to feel the impact of slowing demand for electric vehicles (EVs).

Elon Musk recently denied reports that the company had abandoned plans to produce an inexpensive car, which was one of his long-held goals: making affordable electric vehicles for the masses.

Shares of Tesla were down 0.8% Monday in premarket trading.