Edited: Huang Sheng
Jiemian News reported on May 1 that Musk decided to fire employees of Tesla's electric vehicle charging business. According to two former employees and multiple posts on LinkedIn, Musk decided to fire the head of the business, Rebecca Tinucci, and most or all of the employees who operate and maintain the system. Musk then said on social platforms that Tesla still plans to develop a network of Superchargers, but the pace of new locations will be slowed.
Image source: Photo by reporter Zhang Jian
According to Yicai, on April 29, local time, Musk sent a memo within the company announcing that Rebecca Tinucci, head of Tesla's supercharging team, and Daniel Ho, head of new products, will leave with the entire team, which has about 500 employees.
At the close of trading on April 30, Tesla's stock price fell nearly 6%. The market value evaporated by 34.346 billion US dollars (about 248.7 billion yuan) overnight.
Previously, Drew Baglino, senior vice president of engineering and technology development for Tesla's battery, motor and energy products, also resigned in April.
Tesla will lay off 10% of its workforce globally
"Daily Economic News" previously reported that on April 15, local time, Tesla CEO Elon Musk said in an internal letter to employees that Tesla will lay off 10% of its workforce worldwide, which may affect about 15,000 employees.
Regarding the reasons for Tesla's layoffs, Shen Meng, executive director of Xiangsong Capital, analyzed in an interview with the reporter of "Daily Economic News" that the growth rate of electric vehicle market capacity has slowed down, and Tesla has been doing rapid expansion of production capacity before, and there is a certain amount of resource expansion. After the market trend changes, in order to ensure the stability of gross profit margin, Tesla needs to slim down to meet the tougher challenges in the future.
Image source: Photo by reporter Zhang Jian
Tesla's stock price fell more than 5% after the news of the layoffs. As of the close of trading on April 15 local time, Tesla's stock price fell nearly 5.6%, hitting the lowest closing level in nearly a year, with a market capitalization of $514.28 billion, down about half from its peak of $1.1 trillion two years ago.
There are early "signals" of layoffs
In an internal letter, Musk explained that over the years, Tesla has grown rapidly, setting up several factories around the world. At the same time, however, there has been duplication of roles and job functions in certain areas. As companies prepare for the next phase of growth, it is extremely important to reduce costs and increase productivity.
It is worth noting that at Tesla's 2022 shareholders' meeting held in August 2022, Musk announced that in the future, Tesla is expected to build 10~12 gigafactories around the world, with a planned annual production capacity of 1.5 million to 2 million vehicles per factory, and is confident that it will achieve more than 100 million deliveries in 10 years.
In March 2023, Tesla opened a new factory in Mexico, with a planned investment of about $5 billion and the production of about 1 million vehicles per year. So far, Tesla has five vehicle manufacturing gigafactories around the world (Austin, Texas, Shanghai, California, Berlin, and Mexico).
With the continuous expansion of the company's business, the number of Tesla's employees has also shown a rapid growth trend in recent years, from 38,000 at the end of 2017 to nearly 128,000 at the end of 2022, and then to more than 140,000 by the end of 2023.
According to public data, as of December 31, 2023, Tesla has a total of 140473 employees worldwide. And a 10% layoff means that more than 14,000 Tesla employees will face losing their jobs. "There's nothing I hate more than this [redundancing] decision, but we have to do it. This will enable us to excel, innovate, stay hungry and prepare for the next growth cycle. Musk said in this internal letter.
In February, Tesla began to postpone performance reviews for some of its employees, and then began to spread news of Tesla's layoffs, which could be as high as 20%. The content of the internal letter released by Musk this time undoubtedly confirms the previous news of layoffs, but the layoff ratio is not 20%, but 10%.
National Business Daily, Comprehensive Interface News, CBN, National Business Daily (Reporter: Li Xing)
Disclaimer: The content and data in this article are for reference only and do not constitute investment advice. Do so at your own risk.
National Business Daily