Tesla, in a move outlined in an internal memo reviewed by Reuters on Monday, is trimming its global workforce by more than 10% as it contends with declining sales and heightened competition in the electric vehicle (EV) sector.
CEO Elon Musk stated, “About every five years, we need to reorganise and streamline the company for the next phase of growth,” with two senior leaders, battery development chief Drew Baglino and vice president for public policy Rohan Patel, also departing.
While Musk expressed gratitude for their contributions, some investors expressed concerns. Tesla’s shares closed 5.6% at $161.48 on Monday, with other EV makers like Rivian Automotive, Lucid Group, and VinFast Auto also experiencing declines between 2.4% and 9.4%. Musk emphasized the importance of cost reduction and productivity enhancement in preparing for future growth, prompting the decision to reduce headcount globally.
Additionally, Tesla’s cancellation of its long-awaited affordable car, the Model 2, expected to cost $25,000, has left investors pondering its mass-market growth prospects. Musk’s response to the news, labelling Reuters as “lying” without further clarification, has added to speculation about the car’s future among investors and analysts.
