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Tesla Announces 10 Percent Global Layoffs

By Nithya Bose in Business News, posted April 16, 2024

Tesla is to cut 10 percent of its staff after announcing the departure of two high-ranking executives.

This comes as the automotive giant, celebrated for its market-leading innovations, faces a decline in consumer demand and escalating competition.

This marked a significant shift for Tesla, which has enjoyed years of rapid growth and strong profit margins.

These margins have recently been squeezed, leading Tesla to implement major price cuts to boost sales.

Tesla has also intensified its focus on developing autonomous vehicles to maintain its competitive edge.

Elon Musk, Tesla's CEO, communicated the imminent job cuts in an email to employees.

He said: “About every 5 years, we need to reorganize and streamline the company for the next phase of growth.”

Hours later, Drew Baglino, Senior Vice President of Powertrain and Energy Engineering and an 18-year veteran at Tesla announced his resignation on the social platform X, also owned by Musk.

Elon Musk: “About every 5 years, we need to reorganize and streamline the company for the next phase of growth”

Rohan Patel, another key executive overseeing policy and business development, also revealed he was leaving on X.

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Baglino was a key figure in Tesla's leadership and had primarily contributed to Tesla's battery production initiatives.

Musk publicly expressed his gratitude to Patel for his contributions to the company.

These exits follow the departure of former CFO Zach Kirkhorn last summer, who had been seen as a potential successor to Musk.

Tesla's operational challenges are compounded by its first annual decline in quarterly deliveries since 2020, with an 8.5 percent drop in the first quarter of 2024.

The company struggles against an aging vehicle lineup and robust competition, notably from Chinese EV manufacturers like BYD, which recently outpaced Tesla in global sales.

Despite these hurdles, Tesla continues pursuing ambitious projects, such as a robotaxi and a new, more affordable model to broaden its market reach.

Musk underscored the significance of these projects in his communication to employees, stating that they are developing "some of the most revolutionary technologies in auto, energy, and artificial intelligence."

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