Tesla plans to cut 14,000 jobs as EV market breaks down

By Editor


Tesla, the leader in electric vehicles (EVs) market, is in the process of cutting more than 10 percent of its global workforce or 14,000 jobs, Reuters news report said.

Tesla’s job cut indicates its struggle in the global EV business. Tesla produced over 433,000 vehicles and delivered approximately 387,000 vehicles in Q1 2024. Tesla will reveal its financial performance for the quarter on April 23.

China’s BYD briefly overtook the U.S. company as the world’s largest EV maker in the fourth quarter, In addition, China-based Xiaomi has garnered substantial positive press for its EV business.

Tesla recorded a gross profit margin of 17.6 percent in the fourth quarter, the lowest in more than four years.

“About every five years, we need to reorganize and streamline the company for the next phase of growth,” Tesla CEO Elon Musk commented in a post on X.

Tesla has also confirmed the resignation of Drew Baglino (battery development chief) and Rohan Patel (vice president for public policy).

Drew Baglino was part of the four-member leadership team listed on the company’s investor relations website.

Less than a year ago, Tesla’s chief financial officer, Zach Kirkhorn, left the company, fueling concerns about succession planning.

In 2022, Elon Musk announced a round of job cuts. Still, Tesla has grown the number of employees from around 100,000 in late 2021 to over 140,000 in late 2023, according to filings with U.S. regulators.

Tesla shares closed 5.6 percent lower at $161.48 on Monday. Shares of EV makers Rivian Automotive, Lucid Group and VinFast Auto also dropped between 2.4 percent and 9.4 percent.

“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,” Elon Musk said in the memo sent to all staff.

“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 percent globally,” it said.

Tesla had earlier cancelled its inexpensive car project. Elon Musk had said the car, known as the Model 2 costing $25,000, would start production in late 2025.

GreentechLead.com News Desk

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