Tesla to sack 10% employees globally after weak quarterly performance: Report
Upstox
2 min read • Updated: April 16, 2024, 10:32 AM
Summary
In an internal email, Tesla CEO Elon Musk reportedly said that the company was forced to lay off some employees to support its next phase of growth. The planned layoffs could hit around 14,000 employees of Tesla around the world, the report said.
Electric vehicle maker Tesla Inc is set to sack 10% of its employees globally, after a weak performance in the January-March quarter of 2024, a report said on Monday, April 15. The planned layoffs, if implemented, could lead to the layoff of around 14,000 employees.
Tesla’s alleged layoff plans were reported by tech news platform Electrek, which accessed an internal email sent by the company’s chief executive officer Elon Musk. The billionaire, who also owns SpaceX and X (formerly Twitter), reportedly said that the EV manufacturer is forced to lay off some employees to support its next phase of growth.
“As we prepare the company for our next phase of growth, it is extremely important to look at every aspect of the company for cost reductions and increasing productivity,” Musk was quoted as saying by the publication.
“We've done a thorough review of the organisation and made the difficult decision to reduce our headcount by more than 10% globally,” he reportedly added.
Weak March quarter
Even as the buzz around EVs continues to grow globally, market leader Tesla reported a subdued performance in the January-March quarter, with its total deliveries declining by 8.5% on-year during the three-month period.
The Texas-headquartered company delivered 386,810 vehicles during the quarter, whereas it produced 433,371 vehicles during the same period. The deliveries fell significantly short of Wall Street’s expectation of 454,200 vehicles, which was based on the average estimate shared by 18 analysts polled by Visible Alpha.
Musk’s India plans
Tesla’s lacklustre performance, followed by the news of layoffs, comes at a time when Musk is planning to enter into the Indian market. "Looking forward to meeting with Prime Minister Narendra Modi in India,” he posted on X on April 11.
Musk’s visit to India on April 21-22 will come weeks after India introduced a new EV policy that reduces the import duty on EVs to 15%. However, the reduced duty would be applicable only on those EV makers who pledge to set up a local manufacturing unit with a minimum investment of $500 million.
The new policy came nearly three years after Musk had publicly criticised India’s existing policy of imposing duties in the range of 70-100% on the import of electric vehicles.