Tesla, the world’s largest electric vehicle manufacturer, is set to lay off more than 10% of its global workforce, according to a memo from billionaire owner Elon Musk.
The decision, described as necessary but difficult, will affect over 14,000 employees worldwide.
In the memo, Musk explained that the company conducted a thorough review of its organization and determined the need to streamline its operations to remain competitive and innovative. While the job cuts are aimed at enabling Tesla to navigate its next growth phase, they also signal the challenges the company is facing.
Several top executives, including Andrew Baglino and Rohan Patel, are also set to leave the firm. Baglino, who served as senior vice president of Tesla’s powertrain and energy engineering team, announced his departure after 18 years at the company. Patel, who led public policy and business development, expressed gratitude to Musk for the opportunities and empowerment during his tenure.
Analysts attribute the job cuts to cost pressures as Tesla invests in new models and artificial intelligence. The company has faced challenges in refreshing its aging models amid consumer reluctance due to high interest rates. Competition from China’s affordable electric vehicles has also impacted Tesla’s market share.
Despite these setbacks, Musk remains focused on his goal of making affordable electric cars accessible to the masses. Tesla’s quarterly earnings report, expected later this month, will shed light on the company’s financial performance amid these changes.
As Tesla adapts to market dynamics and internal restructuring, the outlook for the electric vehicle industry remains uncertain. Musk’s commitment to innovation and sustainability will be tested as the company navigates through these challenging times.
