TESLA LAYOFFS NEWS: ELON MUSK'S COMPANY TO CUT JOBS - DETAILS

Tesla Layoffs News: Tesla Inc. is set to reduce its workforce by over 10%, as revealed in a memo from CEO Elon Musk to the company's employees. This news, which was initially reported by Electrek, comes amidst a challenging period for the electric vehicle manufacturer, with its shares dropping more than 5% on Monday.

In the memo, Musk emphasized the necessity of cost-cutting and productivity enhancements in preparation for Tesla's next growth phase. The decision to decrease the global headcount is part of a comprehensive organizational review, according to ET report.

Tesla's growth rate decelerated

As of December 2023, Tesla employed 140,473 individuals worldwide. However, the company's stock has suffered a significant decline, falling 31% since the start of the year. Despite the global rise in electric vehicle sales, Tesla's growth rate has decelerated, facing stiff competition from other manufacturers.

In a notable shift, China's BYD overtook Tesla as the leading electric vehicle producer at the end of 2023. Additionally, Chinese tech giant Xiaomi announced plans in March to launch an electric car priced well below Tesla's Model 3.

Tesla's vehicle deliveries decrease

Musk has acknowledged the competitive landscape in China, where Tesla operates a major factory, suggesting that the future automotive industry could be dominated by Chinese companies.

Tesla's market challenges have been compounded by a decrease in vehicle deliveries, marking the company's first annual drop since the Covid-19 pandemic in 2020. The first-quarter deliveries for 2024 fell 8.5% year-over-year to 386,810 vehicles, with production also declining.

The company recently reduced the subscription cost for its Full Self-Driving (FSD) package in the U.S., contradicting Musk's earlier statements about increasing prices as new features were added. Despite its name, the FSD system does not render Tesla vehicles autonomous and still requires driver supervision.

Tesla financial balance

Tesla's operating margin has also been under pressure, dropping to 8.2% in the fourth quarter from 16% the previous year. The company has cautioned investors that vehicle volume growth in 2024 might be significantly lower than in 2023.

Operational hurdles have further strained Tesla this year, with supply chain disruptions due to maritime attacks in the Red Sea and a temporary halt in production at its Berlin gigafactory caused by a suspected arson incident.

Moreover, Tesla executives Drew Baglino and Rohan Patel have announced their departure from the company. Baglino has been with Tesla since 2006, while Patel joined in 2016 after serving as a senior advisor to former President Barack Obama.

Tesla is expected to announce its first-quarter financial results on April 23. The company's recent developments reflect the dynamic and challenging environment of the electric vehicle industry.

2024-04-16T04:28:04Z dg43tfdfdgfd