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In the new energy vehicle market, Tesla is known as the eternal king, but even this king has recently had problems, and even the media revealed that 14,000 people were laid off worldwide.
1. Tesla, which laid off 14,000 employees worldwide
According to a report by Beijing Business Daily, there was a news on the Internet that "Tesla CEO Elon Musk released an internal email to lay off 10% of the global workforce". In this regard, a person close to Tesla told a reporter from Beijing Business Daily that Tesla employees have indeed received an internal email and will lay off 10% of its global workforce. According to statistics, as of the end of last year, Tesla had a total of about 140,000 employees worldwide. This means that about 14,000 people will be involved in this round of global layoffs.
As the world's top electric vehicle sales, relying on cost control and continuous increase in new car deliveries, Tesla has been running wildly before. However, in the face of fierce competition in the new energy vehicle market, Tesla, which has recently slowed down sales and sounded the "alarm" of gross profit margin, has bid farewell to "lying to win".
Regarding this round of layoffs, Musk said in an internal email that he was "preparing for the next growth phase cycle".
Musk admitted that Tesla is developing rapidly, and there is overlap in roles and job functions in some areas. As you prepare for Tesla's next phase of growth, it's important to look at all aspects of the company while reducing costs and increasing productivity. As part of this, Tesla conducted a thorough review of the organization and made the difficult decision to lay off 10% of its workforce globally, which will allow Tesla to lean and prepare for the next growth phase cycle. When talking about Tesla's future, Musk bluntly said that Tesla is working on some of the most revolutionary technologies in the fields of automobiles, energy and artificial intelligence.
As early as February this year, Tesla broke the news of layoffs, and Tesla executives were asked to identify the "most important roles" in the team and postpone performance reviews for some employees.
2. What happened to Tesla?
When Tesla announced that it would carry out large-scale layoffs around the world, the news undoubtedly caused an uproar in the industry. Tesla, once regarded as a leader in technological innovation and the electric vehicle industry, has made one wonder what happened to the company and why it made such a major change.
First, Tesla's rise is closely linked to its ongoing hiring spree. Over the past few years, Tesla's stock price has soared, and its market value once surpassed that of traditional auto industry giants, showing unprecedented market dominance. This momentum of development is not only due to its technological leadership, brand building and Musk's personal charm in the field of electric vehicles, but also inseparable from the company's active absorption and efficient use of talents.
Tesla is recruiting troops in R&D, production, sales, service and other links to meet the needs of product innovation, production capacity improvement, and market development. In particular, Tesla has invested a lot of manpower and material resources in key technology and infrastructure construction, such as battery technology, autonomous driving systems, and supercharging networks, to maintain its leading position in the industry. In addition, with the rapid development of the global electric vehicle market, Tesla has added factories around the world and expanded its production scale, which has further promoted the growth of its workforce. It can be said that large-scale recruitment and expansion were Tesla's inevitable strategies to cope with the surge in market demand and accelerate market penetration during that period.
Second, however, with the maturity of the electric vehicle market and the change in the competitive landscape, the external environment faced by Tesla has changed significantly. Major competitors such as BYD, Geely, and General Motors are accelerating their electrification transformation and launching a range of highly competitive electric models, while emerging EV brands such as NIO, XPeng, and Wenjie are also emerging in the market segment, posing a challenge to Tesla. Tesla's competition in the Chinese market is particularly fierce, with local brands such as BYD squeezing Tesla's market share by virtue of cost advantages, localization strategies and government support.
Against this backdrop, Tesla's market leading position has taken a hit, and its growth momentum has slowed down. On the one hand, the growth rate of market demand may not be as fast as expected, leading to the risk of overcapacity, and on the other hand, the outbreak of the price war has put Tesla under pressure to decline in profitability. Especially in the case of macroeconomic fluctuations, supply chain tensions, rising raw material prices, inflation and other unfavorable factors, Tesla's cost control ability is facing a severe test.
In the face of increasingly fierce market competition and operational pressure, Tesla's layoffs are aimed at achieving two core goals: reducing costs and improving efficiency. Layoffs can directly reduce human resource costs, including fixed expenses such as salary expenses, welfare packages, office facilities, etc., which can help alleviate short-term financial pressure and improve operating profit margins. In addition, by streamlining the organizational structure and optimizing job settings, Tesla can eliminate redundant positions, reduce internal communication costs, improve decision-making efficiency, and enable the company to respond more quickly to market changes.
Third, in the U.S. corporate system, the labor market is more flexible, and it is considered normal business practice for companies to adjust personnel based on fluctuations in performance. When the market environment is good and the business expands, companies tend to increase hiring to capture growth opportunities, while when the economic downturn and increased competition lead to increased pressure on margins, companies may quickly cut costs and ensure financial health by laying off employees. This dynamic adjustment mechanism of "expanding recruitment if performance is good, and laying off employees if performance is poor" reflects the pursuit of profit maximization by enterprises under the conditions of capitalist market economy.
Tesla, as a typical U.S. listed company, has made a layoff decision in line with this general corporate management logic. While layoffs undoubtedly result in a loss of job security for affected employees, timely personnel adjustments are seen as an important means to maintain a competitive advantage and respond to market risks.
Fourth, for Chinese, stability is often an important value. We are accustomed to working in one unit for a long time and enjoying a stable income and benefits package. However, we should also recognize that a business is a profit-oriented economic organization, and its business strategy and management methods are centered around profit maximization. Therefore, layoffs are a normal business practice for companies, and we should also have the ability to leave at any time to adapt to the changing workplace environment.