Tesla (TSLA.US) will lay off more than 10% of employees worldwide! Tens of thousands of people will be affected

The Zhitong Finance App learned that Tesla (TSLA.US) will lay off more than 10% of its employees globally due to the slowdown in demand for electric vehicles, according to reports. According to the data, by the end of 2023, Tesla had 140,473 employees worldwide. Based on this figure, a 10% layoff would mean 14,000 people would lose their jobs.

The report quoted an email sent to employees by Tesla CEO Musk as saying the reason for the layoffs was “duplication of roles and job functions in certain fields.” In an email, Musk said, “As we prepare for the next phase of the company's growth, it is extremely important to consider all aspects of the company's cost reduction and productivity increase. As part of this effort, we conducted a thorough review of the organization and made the decision to cut more than 10% of our workforce globally. Nothing hurts me more than that, but it must be done”.

At the beginning of this month, Tesla announced poor first-quarter delivery data. The company delivered a total of 386,800 new vehicles worldwide in Q1, down 8.3% year on year and up to 20% month on month. The delivery data of less than 400,000 is far below the 430,000 vehicles generally predicted by analysts. It is also the first time since Q3 2020 that the company's delivery volume declined year-on-year in a single quarter.

A number of analysts expect Tesla's sales volume to shrink throughout this year due to the slow growth in production of its electric pickup Cybertruck, and the company is not expected to start producing the next generation of cars until later next year. Analysts Baird said that in the case of Tesla's Q1 sales collapse, sales in the second quarter are likely to continue to decline again.

Since this year, Tesla's stock price has dropped 31% cumulatively, making it one of the worst performing constituent stocks in the S&P 500 index. As of press release, US stocks fell 0.71% before the market on Monday.

There seem to be signs of Tesla layoffs a long time ago. According to reports, at the beginning of this year, Tesla already asked managers to confirm whether every employee's position is critical. At the end of last year, some salaried employees were also told that the company would not provide performance-based equity rewards in annual performance reviews. Tesla Chief Financial Officer Vaibhav Taneja said during the Jan. 24 earnings call: “We must reduce costs as much as possible. We have a strong team that is very focused on this.”