- Tesla to cut 10% of global staff due to expansion
- CEO Musk cites need for cost reduction amid global expansion
- Decline in vehicle deliveries contributes to restructuring decision
The global personnel of electric vehicle manufacturer Tesla is expected to be reduced by more than 10 per cent, according to a memo distributed to staff members by CEO Elon Musk.
Due to the “duplication of roles and job functions in certain areas” that resulted from the company’s rapid global expansion, Musk informed employees via email on Monday that the reductions were essential.
As we prepare the organisation for its subsequent phase of expansion, it is critical that we examine every facet of the business in an effort to reduce expenses and boost output,” Musk wrote in the memo that was obtained by numerous news organisations.
“In pursuit of this objective, we have conducted an exhaustive organization-wide review and regrettably decided to reduce our global headcount by over 10 percent.” I abhor nothing more than the fact that it must be completed. This will empower us to operate with efficiency, ingenuity, and anticipation for the subsequent phase of expansion.
Elon Musk expressed gratitude to the remaining personnel for the “arduous task that lies ahead” as the organisation laboured to create “revolutionary technologies in automotive, energy, and artificial intelligence.”
Musk stated in an X post after the announcement that Tesla must “restructure and optimise the organisation to facilitate the subsequent stage of expansion” approximately every five years.
The cutbacks were initially reported by Electrek, a media outlet that specialises in sustainable energy and electric transportation.
Tesla disclosed in less than two weeks that vehicle deliveries decreased by 8.5 per cent in the first quarter, marking the first decline from the previous year since 2020.
Supply chain disruptions caused by Houthi attacks on shipping in the Red Sea and an incendiary attack by environmental activists at a production facility in Germany contributed to Tesla’s unsatisfactory results.
Further indications of the organization’s turmoil were the social media posts of two senior executives announcing their departure.
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Senior Vice President of powertrain and Energy Engineering Andrew Baglino stated on X that it was “difficult to decide to leave Tesla after eighteen years.”
Baglino stated, “I am so grateful to have acquired knowledge and collaborated with the innumerable exceptionally talented individuals at Tesla throughout the years.”
Senior global director of public policy and business development Rohan Patel also announced his intention to depart the organisation after eight years of service.
On Monday, Tesla shares declined by over 5 per cent, continuing a losing streak that has seen the stock lose approximately one-third of its value so far this year.
