Tesla lays off 10 per cent of its workforce worldwide – report

Tesla has announced more than 10 per cent of its workforce is being laid off, as the US company grapples with falling sales, reports claim.

According to an internal memo seen by news outlet Reuters, around 14,000 Tesla employees are set to lose their jobs as part of the restructure, based on an estimated headcount at the end of 2023 being in the region of 140,000.

It is not yet known exactly where these jobs are coming from, but some of those who are known to have been laid off are based in the US.

For the last few months it has looked like Tesla might be preparing for a round of layoffs – with the electric car maker allegedly telling managers to identify critical team members, while also cancelling some employees’ annual reviews and scaling back production at its Shanghai factory, reports Electrek.

“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,” Elon Musk said in an email to staff. 

“As part of this effort, we have done a thorough review of the organisation and made the difficult decision to reduce our headcount by more than 10 per cent globally. There is nothing I hate more, but it must be done. This will enable us to be lean, innovative and hungry for the next growth phase cycle.”

The wide-scale lay-off comes after Tesla suffered a fall in deliveries for the first time in almost four years in the first quarter of 2024.

Tesla reported 433,371 new vehicles as produced, and 386,810 as delivered – down 1.7 per cent, and 8.5 per cent respectively in the first quarter of 2023.

Next Tuesday, the company will deliver its quarterly profits report, with analysts estimating it is still likely to turn a profit of around 50 cents a share – but down from 85 cents a share in the first quarter of last year.

The news follows reports earlier this month that plans for the cheapest and smallest Tesla electric vehicle yet have been scrapped to focus on an autonomous version without a steering wheel or pedals.

Tesla CEO Elon Musk denied the report and accused Reuters, the respected global news agency behind it, of "lying" – but the outlet's claim is supported by information attributed to three company insiders, and internal documents it says it has seen.