Tesla will lay off about 14,000 employees - 10% of its entire workforce

At the beginning of the month, Tesla reported a drop in electric car sales for the first time in four years and is now preparing to lay off at least 14,000 employees - 10% of the total workforce (140,473) as of early 2024. Electrek and Reuters write about this, having received a copy of an internal memo sent on behalf of CEO Elon Musk.

It is currently unknown which teams at Tesla will be cut. In addressing the employees, Tesla CEO Elon Musk called the decision to lay off staff the worst, but necessary and essential.

"This is what I hate the most, but it needs to be done. This will allow us to be more cost-effective and innovative until the growth phase in the next cycle."

As a result of the first quarter of 2024, Tesla "defeated" BYD after the last quarter knockout in 2023 and regained leadership in the global electric car market. However, Tesla's sales fell annually for the first time since the COVID-19 pandemic in 2020: in total, Elon Musk's company shipped 386,810 electric cars to customers - 8.5% less than in the same quarter of 2023 (422,875).

The full financial report of Tesla will be published on April 23, then we will find out how much the key financial indicators deteriorate - just remember that the consequences of the price war did not take long to appear. As of now, Elon Musk's company has exhausted the potential for further price reductions in China, which remains the largest market for the company, and profitability continues to decline against the backdrop of slowing growth in Europe and the USA.

In early April, Reuters reported that Tesla had reconsidered releasing the affordable Model 2 electric car for $25,000, which Musk first announced in 2020, and instead decided to focus on the new robotaxi, the release of which has been postponed several times since 2020. In response, Elon Musk called Reuters' reports "false" and announced the robotaxi unveiling on August 8. There is a speculation that Tesla did not actually cancel the release of the Model 2, and on August 8, Tesla will introduce two visually identical models: one will be a steering wheel and pedal-free robotaxi, and the other will be a compact car. Simultaneously, Tesla may announce the start of robotaxi production and push back the version with a steering wheel and pedals to a later date.