Tesla has announced a significant reduction in its global workforce by more than 10%, a strategic move aimed at optimizing productivity and cost-efficiency amidst its rapid expansion, reports Tesla North.
The company under the leadership of CEO Elon Musk, has identified overlaps in roles and job functions as a byproduct of its scaling operations across the globe.
In a memo detailing the decision (via Electrek), Musk described the action as a necessary step towards ensuring the company’s agility and innovation. “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,” Musk stated, underscoring the need for the organization to embrace cost reductions and increased productivity.
The workforce reduction aligns with the departure of key executives, including Senior VP of Powertrain and Energy Drew Baglino and Rohan Patel, Tesla’s Policy and Business Development executive. Both have played critical roles in the company’s development, particularly in areas like relaying news of Full Self-Driving (FSD) subscriptions in Canada.
Reflecting on his experience, Patel shared, “The past 8 years at Tesla have been filled with every emotion – but the feeling I have today is utmost gratitude. To our unbelievable customers and fans – I’m inspired by your passion and impact on @Tesla and the mission.”
Musk, addressing the organizational changes, emphasized their importance for Tesla’s continued evolution. “About every 5 years, we need to reorganize and streamline the company for the next phase of growth,” Musk commented, shedding light on the cyclical nature of corporate restructuring.
About every 5 years, we need to reorganize and streamline the company for the next phase of growth
— Elon Musk (@elonmusk) April 15, 2024
This is not the first time Tesla has made job cuts. It reduced its workforce by 1.6% in 2017, 9% in 2018 and 7% in 2019. In 2022, it lowered its workforce by 3.9%, and now at least 10% in 2024. Tesla’s global employee count is about 140,000.
This announcement comes ahead of Tesla’s Q1 earnings call, scheduled for Tuesday, April 23. In the wake of the news, Tesla’s shares saw a decrease of 5.2%, reflecting the market’s response to the significant organizational changes underway at the company. Tesla is set to reveal its Robotaxi later this year on August 8.
