Tesla announced global workforce reductions of "more than 10%" in an internal email Monday to staff from CEO Elon Musk, according to electric-vehicles.com, a specialist outlet, in a report later covered by Reuters.
Newsweek has not seen the original email and was unable to verify its content. Tesla did not respond to a request for comment.
The Context
The reported layoffs come amid a tough start to the year for Elon Musk and his electric-vehicle company. Quarterly results released at the beginning of April showed that product deliveries fell 8.5 percent from the same period in 2023. It marked the first year-over-year decline since 2020.
Wall Street analyst Dan Ives called this year's Q1 delivery numbers "a code red situation" for Musk and Tesla, during an interview with CNN.
Tesla blamed the drop in deliveries partly on "factory shutdowns resulting from shipping diversions caused by the Red Sea conflict and an arson attack at Gigafactory Berlin."
Tesla shares are down more than 30% this year, and Musk has also slipped from his top spot on the Bloomberg Billionaires Index to third place, behind French luxury-goods tycoon Bernard Arnault and Amazon founder Jeff Bezos.
At the start of this year, Musk's social-media platform X, formerly known as Twitter, was valued at $12.5 billion. He paid $44 billion for it in 2022.
What We Know
Reports surfaced over the weekend that Tesla workers at factories in California and Texas were worried about upcoming layoffs that could be announced as soon as Sunday. Earlier this year Bloomberg reported that managers at the EV maker were asked to identify which roles were critical, and some workers' performance reviews were delayed.
Tesla employs approximately 140,470 people worldwide, from Texas to Shanghai, and the reported 10 percent cuts could impact tens of thousands of workers.
Views
In the email seen by electric-vehicles.com, Musk is said to have written of the 10 percent global workforce reduction, "There is nothing I hate more, but it must be done."
He added, "For those remaining, I would like to thank you in advance for the difficult job that remains ahead. We are developing some of the most revolutionary technologies in auto, energy and artificial intelligence. As we prepare the company for the next phase of growth, your resolve will make a huge difference in getting us there."
What's Next?
Tesla shares opened lower after dropping nearly 1 percent in pre-market trading Monday. The company is scheduled to release its Q1 financial report after market close on April 23.
Update, 4/15/24, 09:52 a.m. ET: This article has been updated with additional information.
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