(RepublicanView.org) – EV giant Tesla has announced that it will cut around 10% of its global workforce following disappointing earnings.
The announcement came via an employee memo on April 15 that was obtained by the press. In it, CEO Elon Musk discussed his company’s “next phase of growth” while putting an emphasis on the necessity of cutting costs. He also noted that an internal audit revealed employees performing duplicate functions across its global workforce before announcing the 10% cut.
The layoffs are expected to impact around 14,000 of Tesla’s 140,473 global employees. Layoffs are expected to begin around mid June to comply with the WARN Act. However, some employees were reportedly already terminated without notice. Several showed up to work that morning only to discover that their badges no longer worked. It caused confusion until they found a separate email informing them of their termination. Fox 7 Austin reported that employees being laid off are still expected to receive pay and benefits until the official termination in June.
The email was sent the same day that Drew Baglino, a top executive at Tesla, announced his sudden resignation on X. He expressed gratitude for the 18 years he spent with the company but offered on details on why he chose to leave.
The layoffs follow disappointing financial performance released earlier in April. The losses lowered Tesla’s market value by about $30 billion and slashed its shares by 5.2%. It also marked the first drop in quarterly deliveries since mid-2020. The losses served as a stark contrast to years of growth that have made Tesla the world’s most valuable vehicle manufacturer.
Tesla is also facing substantial competition from BYD in China. It recently replaced Tesla as the largest manufacturer of EVs in the world. BYD’s cars are cheaper and are considered by some to be more technologically advanced.
Reports show that overall automotive sales actually increased during the same period by 5.1%. However, EV sales slowed during the same period. Many American car buyers are still hesitant about the limited ranges and charging stations that come with EV ownership. Many manufacturers, including Tesla, have tried lowering the prices of EV to attract more sales.
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