With significant layoffs in China, Tesla hits speed bumps
The Tesla layoffs, announced in an email by Chief Executive Elon Musk and revealed by Reuters, have also affected China, with several departments reportedly cutting as much as 30 to 50 percent of their workforce.
The market value of the American electric vehicle giant has fallen below US$500 billion following the announcement of the 10 percent layoffs globally on Monday.
Tesla's layoffs are higher than 10 percent in China, where some departments had cut 30 to 40 percent of their staff, with the figure for the sales department reaching up to 50 percent. The average layoff ratio is around 20 percent, according to a report by ifeng.com.
"Yesterday (Tuesday) afternoon, several internal staff received layoff notices along with compensation amount details," an employee who was among those made redundant told business media outlet Jiemian.
Telsa China declined to comment on Wednesday.
Musk claimed that the main reason for the layoffs was the duplication of roles and job functions in certain areas due to Tesla's rapid growth.
This is Tesla's largest layoff since 2017, with no precedent for layoffs higher than 10 percent.
Tesla employed 140,500 employees worldwide by the end of 2023, which means that more than 14,000 employees will be affected in this round of layoffs.
In addition, Musk has also adjusted the production line operating hours for the Model 3 and Model Y at its Shanghai Gigafactory from the original 6.5 days a week to five days a week.
In the first quarter of 2024, Tesla's delivered 386,800 EV units, down over 8 percent year on year, way below previous institutional forecasts of around 430,000 units.
This is also the first time that Tesla's deliveries have fallen in its quarterly performance in four years.
The company announced that it will break ground in May on its new mega factory project capable of producing 10,000 Megapacks a year in Shanghai.
As Tesla's first energy storage mega factory project outside the US market, it is expected to go into mass production in the first quarter of 2025.
