According to a report by Reuters, Tesla will lay off more than 10% of its global workforce due to declining sales and an intensifying price war for electric vehicles (EVs). The New York Times reports the job cuts will affect about 14,000 people, with two senior executives – Drew Baglino and Rohan Patel – already confirmed to have left the company.

News of the layoffs surfaced after a company-wide email was leaked and reported by Electrek, in which Tesla CEO Elon Musk said, “over the years, we have grown rapidly with multiple factories scaling around the globe. With this rapid growth there has been duplication of roles and job functions in certain areas. 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% globally. There is nothing I hate more, but it must be done. This will enable us to be lean, innovative and hungry for the next growth phase cycle,” he added.

In Q1 2024, Tesla missed delivery estimates and reported a rare year-on-year (YoY) drop in sales by 8.5% (compared to Q1 2023) with 386,810 units. This represents the company’s first YoY decline in deliveries since 2020 when its operations were affected by the Covid-19 pandemic.

While Tesla does not provide a breakdown of deliveries by region, it is assumed that the decline largely occurred in China, where Chinese EV makers are gaining ground and pushing to expand its export market. Tesla has also reportedly cancelled plans for a low-cost EV which was expected to start at about USD25,000 (about RM120k) due to fierce competition from Chinese automakers that can offer EVs at even lower prices.

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