Sources expose Tesla cuts
Global job cuts at Tesla include the company decreasing staff numbers in the US and China, which are the marque’s two biggest markets.
Employees across sales, technology and engineering have been briefed on what’s happening, according to five Reuters’ sources.
Chief executive officer Elon Musk this week told staff the company is laying off more than 10 per cent of its workforce worldwide as it grapples with falling sales and an intensifying price war for electric cars.
Several US-based service centres saw heavy immediate lay-offs, primarily of sales staff and technicians, according to one source, while another location laid off all front-of-house staff.
A notice from the company reveals 285 of its 2,032 employees across two sites in Buffalo, New York, are being made redundant. It says the layoffs will start on July 15 and are due to "economic" reasons.
A Tesla programme manager in California also posted a spreadsheet on LinkedIn of more than 140 staff, mostly engineers, who had been laid off and were seeking new jobs.
Two Reuters sources report members of Tesla’s China sales team have been notified they are being made redundant, with one saying more than 10 per cent were losing their jobs.
A third source said that in Shanghai, where Tesla’s largest plant is located, the company will only lay off a small proportion of staff amounting to “several dozen” people.
“The sweeping lay-offs should now leave no doubt that the decline in deliveries has been a function of lower demand and not supply,” says analysts at JP Morgan. They add it “has far-reaching implications for the hypergrowth narrative still embedded in Tesla’s share price”.
All of its sources declined to be named as they were not permitted to speak to media, reports Reuters, and Tesla’s headquarters in the US and its China unit did not immediately respond to requests for comment.
Tesla Germany refuted reports in German media that 3,000 of the carmaker’s roughly 12,000 staff had been fired, stating it’s evaluating how to implement Musk’s orders at the plant.
While German labour law has strict rules on firing staff, around 1,000 workers at the Gigafactory Berlin-Brandenburg are believed to be on temporary contracts, leaving them more vulnerable to dismissal.
“About every five years, we need to reorganise and streamline the company for the next phase of growth,” Musk stated in a post on X, formerly Twitter.
In a memo to staff, he said: “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.
“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.”
Tesla faces increasing competition in China in a fierce price war with rivals led by BYD, slowing sales in the US, and investment costs in new models and artificial intelligence.
