Tesla Plans to Lay off More than 10% of its Employees Worldwide

On April 15, Tesla revealed that Elon Musk had announced via an internal letter that it would cut more than 10% of its employees worldwide. Musk said in the letter: "To reduce costs and increase productivity, it is extremely important to scrutinize every aspect of the company."

It is known that Tesla's employee growth in recent years has been very rapid, growing from 38,000 employees in 2018 to 140,000 at the beginning of 2024, which means that this layoff will involve at least about 14,000 Tesla employees.

The following is the content of the internal letter from Musk to the employees:

"Over the years, we have grown rapidly and opened several factories worldwide. With this rapid growth, certain areas have seen duplication of roles and job functions. As we prepare for the next phase of growth for the company, it is extremely important to scrutinize every aspect of the company to reduce costs and increase productivity.

As part of this work, we have thoroughly reviewed the organization and made the tough decision to reduce global staff by more than 10%. Nothing could be more hateful to me than this, but it is a must. This will enable us to become lean, innovate, and aspire for the next growth cycle. I want to thank all the people who have left Tesla for their hard work over the years. I am very grateful for the many contributions you have made to our mission and wish you all the best for the future.

It's hard to say goodbye. For those who remain, I want to thank you in advance for the hard work you face. We are working on some of the most revolutionary technologies in the fields of automotive, energy, and artificial intelligence. As we prepare for the next stage of the company's development, your dedication will have a huge impact on achieving this goal."

This is already the fifth time Tesla has laid off workers since 2017, with cuts of 2% in 2017, 9% in 2018, 7% in 2019, and 3% in 2022. However, looking at the rapid growth in the number of employees in recent years, the actual growth of Tesla employees is much more than layoffs. Regarding this layoff, Musk said that it will not involve hourly workers, mainly full-time employees.

In the first quarter of 2024, Tesla produced more than 433,000 vehicles in total, with the delivery of approximately 387,000 vehicles, a decrease of 8.5% compared to the same period last year, and the first year-on-year decline in recent years, which dropped by 20.2% compared to the fourth quarter of last year. How much of this layoff action is due to poor market performance?