Tesla laid off employees and the head of the battery resigned
Musk sent an all-staff letter on April 15, confirming a 10% global layoff. According to Tesla's headcount estimate by the end of 2023, it will affect about 14,000 people. Musk said that the layoffs are to reduce costs and increase productivity, preparing the company for the next phase of growth.
A Tesla North American employee told "Late Finance" that the all-staff letter was sent in the early hours of local time. The employee learned that some of the laid-off employees had clocked in on time without receiving a personnel notice, and then found that their key cards were invalid and they could not log in to the company's internal systems. As of press time, Tesla's headquarters has not responded.
Tesla's deliveries fell 8.5% year-on-year in the first quarter, selling only about 386,000 new vehicles and increasing inventory by 47,000 units. Tesla's Shanghai factory has cut production since the beginning of last month. The market had certain expectations for layoffs, and the stock price fell only about 0.5% in pre-market trading after the news was announced, and fell sharply to about -3% after the opening.
Some employees saw the signs of cost reduction earlier. In February, Tesla postponed performance reviews for some of its employees. Late last year, Tesla executives told some salaried employees that the company would eliminate performance-based equity awards. Tesla had laid off 3,200 and 200 employees in 2019 and 2022, respectively, to reduce costs.
Tesla's workforce has swelled tenfold over the past eight years, with more than 140,000 employees worldwide by the end of last year. The first large-scale expansion was in 2016 when the Model 3 was mass-produced. The latter was during the commissioning of the Shanghai Gigafactory from 2019 to 2020. During the epidemic, the Model Y became the world's best-selling single model, Tesla's new cars were in short supply, and its number of employees was also nearly 30,000 new every year in the past three years.
However, as Tesla's existing models have not been replaced, the new Cybertruck has encountered a production capacity crisis, and more competitors continue to deliver models that are more cost-effective or have a comprehensive product strength equal or even exceed the Model 3/Y, eating up Tesla's market space.
According to the January earnings conference, Tesla's next-generation electric vehicle will not be launched until the end of 2025 at the earliest. Recently, it was reported that Tesla had canceled the development plan for the next generation model with a target price of $25,000, but Musk denied it.
The day before Tesla announced the layoffs, Drew Baglino, the head of the company's battery division, officially announced his departure. He joined Tesla in 2006 and is responsible for leading the 4680 battery project, reporting directly to Elon Musk. (Zeng Xing)