When Tesla CEO Elon Musk announced plans to cut the company’s global workforce by around 10%, he portrayed it as a difficult but necessary decision to “reduce costs and improve productivity.” But sources familiar with the situation say Tesla’s layoff figures drastically understate how swingeing the staff reductions actually were in Tesla’s Chinese operations.
According to insiders, some Tesla departments in China saw staffing levels slashed by an incredible 30-40% in the culling – more than triple the 10% cited by Musk. In particularly hard-hit teams like sales, headcounts were halved with a staggering 50% of staff let go.
Even in less severely impacted divisions, the cuts still cut far deeper than 10% with sources citing average 20% workforce reductions per department across Tesla’s China operations.
Not only were the numerical cuts more brutal than portrayed, but the terms were too. Sources say laid-off staff in China were offered severance packages ranging from just one to three months’ salary, depending on their tenure. Those accepting immediate departure got bumped up to three months’ pay as an extra incentive to exit swiftly.
It’s a ruthlessly lean approach that aligns with Musk’s stated desire “to be lean, innovative, and aggressive” as Tesla girds for its “next growth cycle.” But it also seems to jar with the CEO’s claims that “there is nothing I hate more than layoffs.”
When discussing the company’s future direction, Elon stated, “We are working on some of the most revolutionary technologies in the automotive, energy, and AI fields.”