Tesla, the electric vehicle company based in Austin, Texas, is planning to lay off about 10% of its workforce in an effort to reduce costs and increase productivity. This decision comes after the company reported disappointing sales figures for the first quarter of the year. The layoffs could affect around 14,000 of Tesla’s 140,473 employees, as reported by multiple media outlets on Monday.
CEO Elon Musk outlined the plans in a memo sent to employees, emphasizing the need to examine every aspect of the company for cost-cutting opportunities as Tesla prepares for its next phase of growth. The news of the layoffs was first reported by the electric vehicle website Electrek.
In addition to the layoffs, two key Tesla executives announced their departure from the company on the social media platform X. Andrew Baglino, senior vice president of powertrain and energy engineering, and Rohan Patel, senior global director of public policy and business development, both stated that they were leaving Tesla after 18 and 8 years, respectively.
Baglino, who held several top engineering positions at Tesla and served as chief technology officer, expressed his gratitude for the opportunity to contribute to the company’s mission of accelerating the transition to sustainable energy. He mentioned that he has no concrete plans for the future, except for spending more time with his family and young children.
Tesla’s shares fell more than 3% on Monday following the news of the layoffs and executive departures. The company’s stock has lost about one-third of its value so far this year, as electric vehicle sales have slowed down and competition has increased worldwide.
In the first quarter of 2023, Tesla delivered 386,810 vehicles, which is nearly 9% lower than the 423,000 delivered in the same quarter last year. To address the slowing demand and increasing competition, Tesla has cut prices by up to $20,000 on some models since last year. However, these price cuts have led to a drop in used electric vehicle values and have impacted Tesla’s profit margins.
The company has announced plans to reveal an autonomous robotaxi at an event in August, as it continues to navigate the challenges of the evolving electric vehicle market.
The Associated Press contributed to this article.