Tesla will be cutting down its total global workforce by 10%, or at least 14,000 workers, following slower sales growth in an increasingly steeper EV market.
The automaker has recorded 140,473 employees at the end of last year.
(Photo : Robyn Beck/AFP via Getty Images)
In an employee memo first reported by Electrek, CEO Elon Musk said the layoff was made as "there has been duplication of roles and job functions in certain areas."
Among the affected employees were senior vice president Drew Baglino and business development head Rohan Patel.
Rumors of a massive job cut in the company have been going on since February as the EV manufacturer failed to meet its expected goal during the previous quarter.
It did not help that Tesla also delayed its performance review report in February while Musk was noted as asking for "relevant" positions in the company.
Previous estimates suggested at least 20% of the total workforce could be affected. It remains uncertain if Tesla will still conduct another set of layoffs following this week's announcement.
Also Read: Tesla Employees Worried for Layoffs Amid Company Sales Trouble
Tesla Struggles to Recover from Sales Slowdown Amid Transition Troubles in the US
Reports of Tesla's sales troubles have been noted since last year as demand for electric vehicles continued to drop in the US over the past 12 months.
California, where most of the EV sales were made, suffered its lowest sales record yet during last year's third quarter.
Tesla had the most notable sales drop with a 10.5% decline despite its flagship Cybertruck released during the same period.
The dropdown in sales can be pointed to the government is facing headwinds in its goal to shift towards carbon-free cars amid pushbacks from other lawmakers and car dealers due to profit concerns.
With the current lower demand for EVs, the government is finding it increasingly hard to resume its ramp-up to reach its goal of a 30% transition by 2026.
Related Article: EVs Having Low Resale Value Could Hurt the Transition from Fossil Fuels, Experts Say
Tesla Slashing Down Prices to Get Over Market Troubles
As the company faces financial troubles from lower demands and delivery disruptions, Tesla has been launching several price cuts for its products in an attempt to attract more buyers.
The company has been earlier reported of reducing prices for its driving assistant system, as well as its Model Y vehicles. This is in addition to the massive discounts rolled out in China where Tesla seems to be focusing more on its business lately.
The profit-saving methods, however, were met with lower trust from investors as Tesla recorded a 31% share drop from last year's numbers.
