Elon Musk's Tesla to lay off more than 14,000 of staff globally to save costs

Tesla is letting go of thousands of employees, with CEO Elon Musk sending out an email to inform them. The layoffs will affect over 10% of Tesla's workforce, but the exact number is uncertain. According to Electrek, it could be around 14,000 employees.

 

This news is surprising because it was just reported that Musk planned to increase pay for Tesla engineers to prevent OpenAI from attracting them with better salary offers.

 

The email states that the latest layoffs will assist Tesla in cutting costs and boosting productivity. Musk emphasizes that while the decision is tough, it's crucial for preparing for the next phase of growth.

"Over the years, we have grown rapidly with multiple factories scaling around the globe. With this rapid growth, there has been duplication of roles and job functions in certain areas. 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 wrote.

"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% 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," he added.

 

Tesla finished last year with 140,473 employees, double the number from three years prior. The company has been increasing production at two plants, one in Austin and the other outside Berlin.

 

The layoff reports follow Tesla's disappointing vehicle deliveries earlier this month, where it fell far short of expectations. This marked the company's first quarterly decline in four years. Experts suggest that Tesla's sales might shrink for the year due to slowing output of its newest model, the Cybertruck.

 

Around mid-2022, Tesla reportedly cut about 10% of its salaried workforce, as per Bloomberg.