Tesla will lay off at least 10% of its staff worldwide
Tesla has been grappling with two major issues since the start of 2024. The decline in its sales and the intensification of the price war on the electric vehicle side. The company is therefore in strategic reassessment. Price drop, increase in production volume, Tesla is elbowing its way to maintain its leading position in the electric automobile market. To continue its readjustment, Tesla announced Monday that the company will lay off more than 10% of its workforce worldwide.
Objective: growth
In its latest annual report, Tesla said it was hiring more than 140,473 people worldwide. The memo, reported by the media Reuters, does not specify how many employees will lose their jobs, but states that more than 10% of the global workforce will be affected. This therefore means that at least 14,000 people will find themselves without work over the coming days.
Moreover, the information reported by Reuters states that some staff members have already been informed of their dismissal. Tesla CEO Elon Musk clarified in the note that “we (Tesla) are preparing the company for our next phase of growth. It is extremely important to look at all aspects of the business to reduce costs and increase productivity.” Mr. Musk added: “As part of this effort, we conducted a thorough review of the organization and made the difficult decision to reduce our workforce by more than 10% globally. »
Another disruption on the stock market
This announcement also had repercussions on the stock market and led to a preliminary drop of 0.3% in the company’s shares. This decrease comes on top of Tesla’s inglorious stock market year where the stock has fallen about 31% so far.
The planned job cuts come after news this month that global vehicle deliveries in 1er quarter had fallen for the first time in almost 4 years; price cuts have failed to stimulate demand.
Tesla, which reports quarterly results on April 23, is preparing for a slowdown in 2024 after years of rapid sales growth. Electric car market leader BYD overtook the US company as the world’s largest electric vehicle manufacturer in 4e quarter of 2023.
This situation in the Chinese market pushed Tesla to lower its prices, but the company was unable to slow down and recorded a gross profit margin of 17.6% as of 4e quarter, the lowest in more than four years.
