Tesla has reportedly sent out an internal memo to its employees, informing them that the electric car maker plans to lay off over 10 percent of its total workforce.
CNBC has posted the alleged full memo, which was written by Tesla CEO Elon Musk. He stated that it was "extremely important" that Tesla look at all parts of the company to help cut costs. He added:
As part of this effort, we have done a thorough review of the organization 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.
Reuters also reports, via unnamed sources, that some employees have already been informed of the layoffs in California and Texas. Tesla has, as of this writing, not commented officially on these reports. Its stock price was 4 percent lower today as trading started.
As of December 2023, the company stated it had 140,473 employees. That means this new layoff event will likely affect over 14,000 team members.
Tesla has been fighting lower sales as more and more car makers start to ramp up their own electric vehicles. Car deliveries from the company declined 8.5 percent in the first quarter of 2024. Its stock price has also gone down 31 percent so far this year before today"s trading.
Earlier this month, Reuters also reported that Tesla had decided to scrap plans to make a more affordable electric car due to competition from Chinese companies. That report was denied by Musk himself, who accused Reuters of lying in a post on his X (formerly Twitter) account. It will be interesting to see how Tesla plans to bounce back from these lower sales and its employee layoffs.