Yahoo Finance Tesla to slash more than 10% of its global workforce
Tesla Inc. is laying off more than 10% of its workforce, Chief Executive Elon Musk wrote in an email to staff.
Musk cited job overlap and the need to reduce costs, according to the email sent late Sunday. Bloomberg News estimated that the layoffs would affect more than 14,000 employees.
Read more: Fisker had big dreams to compete with Tesla. What went wrong with this Manhattan Beach company?
“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,” Musk wrote in the email viewed by The Times.
“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," he continued. "There is nothing I hate more, but it must be done.”
The reduction comes as the Austin, Texas-based carmaker and its rivals contend with less demand for electric vehicles in a crowded field.
"It’s an ominous sign of some dark days ahead," said Dan Ives, managing director at Wedbush Securities. "Streamlining is one thing, but the size of this cut is a concern for a company that’s still in growth mode."
Although Tesla moved its headquarters from California to Texas in 2021, it still operates a massive factory in Fremont that is one of the largest manufacturing sites in the state.
In January, Tesla reported disappointing fourth-quarter earnings that included its first year-over-year decline in quarterly deliveries in four years. Revenue and earnings per share also missed estimates.
Industry sales have slowed amid higher interest rates that have made the costly cars more expensive and have increased the challenges of expanding the market beyond the affluent first adopters who made Tesla one of the most highly valued companies in the world.
Earlier this year, Manhattan Beach-based Fisker Inc. announced it was cutting 15% of its 1,200-person workforce, halting production for six weeks and working on a deal for $150 million in new financing, dependent on forging a strategic relationship with a major auto manufacturer.
However, it was unable to obtain the financing after talks ended with the manufacturer.
Lucid Motors, a Newark, Calif.-based maker of luxury sport utility vehicles and sedans, got a $1-billion cash infusion in March from its biggest backer, an affiliate of Saudi Arabia’s Public Investment Fund. In February, Apple announced it was ending development of a self-driving electric vehicle after reportedly spending more than $10 billion on the project over a decade.
On Monday morning, Drew Baglino, Tesla's senior vice president of powertrain and energy, announced on X, formerly Twitter, that he was leaving the company.
"I made the difficult decision to move on from Tesla after 18 years yesterday," he wrote. "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 a reply, Musk wrote: "Thanks for everything you’ve done for Tesla. Few have contributed as much as you."
Tesla's stock Monday closed at $161.48, down nearly 6%. The company is scheduled to report first-quarter earnings April 23.
"Investors need answers from Musk on next week’s call because it’s been a string of bad news," Ives said. "I consider it a fork-in-the-road period for Tesla and Musk. It was a Cinderella story for years, but now it’s turned into a scene out of the 'Thriller' video.”
Times staff writers Russ Mitchell and Laurence Darmiento contributed to this report.
This story originally appeared in Los Angeles Times.
