Tesla Plans To Lay Off 10% Of Workforce After Dismal Quarterly Sales, Multiple News Outlets Report

DETROIT — Following disappointing first-quarter sales, Tesla plans to lay off around a tenth of its personnel to slash expenses, according to numerous media reports.

Elon Musk, the CEO, disclosed the plans in a note to employees. The layoffs could affect approximately 14,000 of the 140,473 employees who worked for the Austin, Texas-based corporation at the end of last year.

Tesla Plans To Lay Off 10% Of Workforce After Dismal Quarterly Sales, Multiple News Outlets Report

Musk’s message stated that as Tesla prepares for its next phase of expansion, “it is extremely important to look at every aspect of the company for cost reductions and increasing productivity,” according to The New York Times and CNBC. Electrek, an electric vehicle website, initially reported the layoffs.

Also on Monday, two prominent Tesla execs announced their departure via the social networking platform X. Andrew Baglino, senior vice president of powertrain and energy engineering, announced his decision to resign after 18 years with the company.

Rohan Patel, senior global director of public policy and business development, announced on X that he was departing Tesla after eight years.

Tesla Plans To Lay Off 10% Of Workforce After Dismal Quarterly Sales, Multiple News Outlets Report

Baglino, who held numerous senior engineering positions at the company and was the chief technology officer, stated that quitting was difficult. “I loved tackling nearly every problem we solved as a team and feel gratified to have contributed to the mission of accelerating the transition to sustainable energy,” he stated in an email.

He has no definite plans other than spending more time with his family and small children, but he admits to having difficulties staying stationary for lengthy periods of time.

Musk praised Baglino in response. “Few have contributed as much as you,” he wrote in an email.

Monday afternoon, Tesla shares plummeted 4.8% after news of layoffs and departures surfaced. Tesla Inc. shares have lost around one-third of their value this year as electric vehicle sales slow.

Tesla sales fell substantially last quarter as global competition grew, electric vehicle sales growth stagnated, and price cuts failed to attract new customers. The business said it supplied 386,810 automobiles from January to March, about 9% less than the 423,000 it sold in the same quarter last year.

Tesla Plans To Lay Off 10% Of Workforce After Dismal Quarterly Sales, Multiple News Outlets Report

Since last year, Tesla has reduced costs on several models by up to $20,000 in response to increased competition and declining demand. The price decreases have caused used electric vehicle prices to fall, reducing Tesla’s profit margins.

The business has announced that it will unveil an autonomous robotaxi at an event in August.

SOURCE – (AP)