TESLA LAYOFFS AFTERMATH: TOP PERFORMERS FIRED, MUSK'S SUCCESSOR TO THRONE LEAVES

It seems that just like with Twitter (Now X, as Musk would have people refer to it) the layoffs announced by Tesla’s management was nothing short of chaotic.

The recent layoffs at Tesla in which about 10 per cent or 10% of employees were terminated, was haphazard to say the least. Several managers and team leads at the EV company have spoken to news outlets, claiming that some departments have seen their headcounts go down by as much as 20 per cent.

What’s more worrisome is that the people laid off from Tesla included high performers.

The layoffs, according to Musk and Tesla’s senior management, are primarily due to the company's poor financial performance.

Despite delivering a record 1.81 million vehicles in 2023, Tesla's margins suffered due to repeated price cuts aimed at boosting sales and outdoing competitors.

This announcement comes just a week before Tesla is set to report its first-quarter earnings, amidst narrowing proof fit margins which is the result of a long and drawn-out EV pricing war.

The layoffs, affecting over 10 per cent of the workforce, or about 14,000 employees globally, were aimed at reducing costs and increasing productivity in preparation for the company's "next phase of growth," according to an email that Musk sent to the staff at Tesla.

Sources speaking anonymously to TechCrunch revealed that many of the laid-off employees were high performers and were hired for critical projects that were once deemed critical for the EV giant. However, because those projects were taking too long and were too complicated, they were pushed down the priority list.

Other critical departments across the company experienced layoffs beyond the initially outlined 10 per cent. In certain cases about 20 per cent people from the team were laid-off

Additionally, two high-profile executives, Drew Baglino and Rohan Patel, have also departed from Tesla.

Baglino, Tesla's Senior Vice President of Powertrain and Energy, has been working with the EV maker for 18 years, which is almost all its life. While speaking to a few news outlets, Baglino expressed confidence in his leadership team and the company's energy businesses. Patel, Vice President of Public Policy and Business Development, attributed his departure to "big overall changes" at Tesla while speaking to certain media outlets.

During his tenure, Baglino was in charge of two of Tesla’s most critical areas. Baglino oversaw engineering for the company’s powertrain and battery. He was also one of the more responsive executives on X.

Baglino’s departure is particularly shocking even for Musk loyalists. For long Baglino was considered Musk’s right-hand man, his 2IC at Tesla. Musk was grooming Baglino to run Tesla after he would step down.

The shakeup is in line with Musk's renewed focus on developing fully self-driving cars, or robotaxis.

It was rumoured recently that Tesla has scrapped its plans for a lower-cost EV and will be using the underlying platform for a rumoured robotaxi, which it will unveil on August 8 of this year.

Baglino's exit follows the departure of Tesla's previous CFO, Zachary Kirkhorn, and aligns with Musk's expressed desire to focus more fully on Tesla and help the company become a leader in AI and robotics.

(With inputs from agencies)

2024-04-16T08:55:03Z dg43tfdfdgfd