Tesla, the electric vehicle company based in Austin, Texas, is set to lay off approximately 10% of its workforce following disappointing first-quarter sales figures. This decision comes as part of the company's efforts to streamline operations and reduce costs amidst challenging market conditions.
CEO Elon Musk outlined the layoff plans in a memo to employees, indicating that around 14,000 employees out of the total workforce of 140,473 could be affected. Musk emphasized the importance of cost reductions and increased productivity as Tesla gears up for its next phase of growth.
In addition to the layoffs, two key executives announced their departure from the company on social media. Andrew Baglino, senior vice president of powertrain and energy engineering, and Rohan Patel, senior global director of public policy and business development, shared their decisions to leave Tesla after several years of service.
Tesla's stock prices dropped by 4.8% following the news of the layoffs and executive departures. The company has experienced a 33% decline in its stock value this year, attributed to softer electric vehicle sales, heightened competition, and global market challenges.
Last quarter, Tesla reported a significant decrease in sales, delivering 386,810 vehicles compared to 423,000 in the same period last year. To address the slowing demand and increased competition, Tesla has implemented price cuts of up to $20,000 on certain models, impacting both sales and profit margins.
Despite these challenges, Tesla is gearing up to unveil an autonomous robotaxi at an upcoming event in August, signaling the company's commitment to innovation and technological advancement in the electric vehicle sector.
