Elon Musk, the CEO of electric car manufacturer Tesla, informed staff members in a memo that the company intends to reduce employment by over 10 percent worldwide.
Musk emailed employees on Monday that the company’s rapid global expansion caused a “duplication of roles and job functions in certain areas,” which was why the layoffs were necessary, according to Al Jazeera.
“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 said in the memo obtained by multiple media outlets.
“As part of this effort, we have done a thorough review of the organisation and made the difficult decision to reduce our headcount by more than 10 per cent globally. There is nothing I hate more, but it must be done. This will enable us to be lean, innovative and hungry for the next growth phase cycle.”
Musk expressed gratitude to the surviving employees for the “tough work that lies ahead” while the business developed “revolutionary technologies in auto, energy, and artificial intelligence.”
Musk stated that Tesla needed to “reorganize and streamline the company for the next phase of growth” around every five years in a post on X following the news’ release.
The layoffs were initially reported by Electrek, a media outlet that focuses on renewable energy and electric vehicles.
Less than two weeks have passed since Tesla revealed that car deliveries decreased by 8.5 percent in the first quarter of this year—the first decline from 2020 onward.
Tesla’s dismal performance came after attacks by environmental activists at a German production site, causing supply chain interruptions, and attacks by the Houthis on Red Sea vessels.
Two senior executives of the corporation announced their departure on social media, indicating even more turmoil within the organization.
Senior vice president of powertrain and energy engineering Andrew Baglino stated on X that he has chosen to leave Tesla after eighteen years, calling it a “difficult decision.”
“I am so thankful to have worked with and learned from the countless incredibly talented people at Tesla over the years,” Baglino said.
The company’s senior global director of business development and public policy, Rohan Patel, also announced his departure after eight years.
On Monday, Tesla’s stock saw a decline of almost 5%, extending a negative trend that has seen the company lose around one-third of its value this year.
