In an email to employees, CEO Elon Musk revealed the Tesla’s reducing its global headcount by over 10% – impacting around 14,000 workers.
Elon Musk cited operational bloat and overlap as key reasons for the drastic staffing cuts. “With this rapid growth there has been duplication of roles and job functions in certain areas,” the CEO wrote. “As we prepare the company for our next phase of growth, it is extremely important to look at every aspect…for cost reductions and increasing productivity.”
While Mass layoffs are never easy, Musk tried to frame the workforce reduction as a difficult but necessary step to streamline Tesla for its “next growth phase cycle.” He added: “There is nothing I hate more, but it must be done. This will enable us to be lean, innovative and hungry…”
Still, slashing over 10% of your staff is a bitter pill, especially for a company riding sky-high on ambitious expansion plans across EVs, energy products, AI, and more. It begs the question: will culling so much talent actually help or hinder Tesla’s future growth?
Tesla had a rough start to 2024 from a deliveries perspective, produced 433,371 vehicles in Q1 of 2024 but only managed to deliver 386,783 to customers.