Tesla, the electric vehicle giant, recently made headlines with the announcement of layoffs affecting over 10% of its global workforce. The layoffs, which have impacted high performing employees and some departments by as much as 20%, were attributed to the company’s poor financial performance.
Despite delivering a record 1.81 million vehicles in 2023, Tesla’s profit margins have been narrowing due to an ongoing electric vehicle price war. To increase sales, the company slashed prices, negatively impacting its profitability. CEO Elon Musk stated that the layoffs were necessary to reduce costs and increase productivity for Tesla’s next phase of growth.
Notably, high performing employees were among those laid off, with many working on projects that have fallen lower on Tesla’s priority list. The company recently shifted its focus towards building fully self-driving cars, abandoning plans for a lower-cost electric vehicle.
In addition to the layoffs, two high-profile executives, SVP of Powertrain and Energy Drew Baglino and VP of Public Policy and Business Development Rohan Patel, have left the company. Baglino cited the need for change after 18 years at Tesla, while Patel described “big overall changes” at the company as the reason for his departure.
These departures come as Musk aims to focus on leading Tesla in AI and robotics, potentially seeking more control over the company’s future direction. This strategic shift in direction and the impact of the layoffs on Tesla’s workforce and operations have raised questions about the company’s stability and future trajectory. Stay tuned for more updates on this developing story.
“Prone to fits of apathy. Devoted music geek. Troublemaker. Typical analyst. Alcohol practitioner. Food junkie. Passionate tv fan. Web expert.”