Tesla will lay off more than 10% of global workforce: Read Elon Musk memo

In a recent memo to employees, Tesla CEO Elon Musk revealed plans to trim over 10% of the company’s global workforce as part of a cost-cutting and productivity enhancement initiative.

The decision comes amidst a challenging landscape for the electric vehicle (EV) manufacturer, with Tesla’s shares down 3% on Monday morning and a year-to-date decline of 31%.

Musk emphasized the necessity of scrutinizing every aspect of the company as they prepare for the next phase of growth. With an eye on increasing efficiency and reducing costs, Tesla conducted a thorough review of its organization, resulting in the difficult decision to downsize its workforce.

The memo, initially reported by Electrek, sheds light on Tesla’s response to slowing sales growth and increased competition in the EV market. Despite the ongoing popularity of electric vehicles globally, Tesla has faced stiff competition, notably from Chinese manufacturers like BYD and Xiaomi.

The latter’s announcement of an affordable electric car further intensifies the competitive landscape.Acknowledging the evolving market dynamics, Musk previously commented on the rise of Chinese car companies, hinting at the shifting paradigm within the industry. However, Tesla’s challenges extend beyond competition, with some potential customers expressing reservations due to Musk’s controversial statements.

Furthermore, Tesla reported its first annual decline in vehicle deliveries since 2020, citing production disruptions and logistical challenges. Supply chain disruptions, including maritime attacks in the Red Sea and incidents like suspected arson near Tesla’s gigafactory in Berlin, have added to the company’s woes.Despite these challenges, Tesla remains committed to innovation, evidenced by recent adjustments in subscription pricing for its Full Self-Driving (FSD) option. However, concerns persist over the company’s operating margin, which saw a significant decline in the fourth quarter of the previous year.

As Tesla prepares to announce its first-quarter financial results on April 23, investors remain vigilant amid uncertainties regarding future growth prospects. With the EV market poised for continued expansion, Tesla’s strategic decisions and ability to navigate challenges will be closely monitored by industry observers.