Tesla is Laying Off More Than 10% of Its Global Workforce As Sales Decline:

Tesla has informed in a letter within internal company that the company will let go of more than “10%” of its staff from a Global scale. According to a report that has been published few days before, Tesla is gearing itself up for a massive layoff.

Regarding Tesla, it has been reported that the company has the potential of laying off workers in the next couple months. Tesla required managers to pick out essential staff members and ceased to bestow stock rewards payable to a certain batch of employees until their annual reviews are completed. On the other hand, it simultaneously hindered production at Gigafactory in Shanghai.

And later, on Friday, it was heard that different sources claiming that these cuts were about to happen, hence, yesterday an overview was done on it. It was being reported that layoffs were as high as 20% and also that Cybertruck production shifts at Gigafactory Texas were to be shortened (perhaps despite CEO Elon Musk’s recent comment that Cybertruck is now the product which is currently production constrained).

This gossip has now been confirmed to be true (that number was indeed lower), although through an internal company email sent by Musk, which leaked as soon as it had been released.

Full Text of the Email:

In the email, Musk said that:

”Over past years, it considerably has increased for the reason of many factories operating up throughout the world. As a result of this tremendous expansion, some positions in certain areas have been found to be redundant or even seem to overlap. Along with expanding the company to a new phase, we have to look at all the aspects of our company in order to reduce expenses and improve productivity.

In this process, we conducted a review of the current organizational structure and made a very tough decision to decrease the headcount by more than 10% globally. I loathe it, though we need it. This will enable us to be fast, inventive, and ready for the next phase of growth that await us.

I want to express my appreciation to those who are leaving Tesla for the mission achieving work they have performed, for years now. I am very appreciative of all the remarkable things you have done to our common mission. We wish you the best in your new endeavors. It appears to be impossible to say farewell us.

For those who choose to stay, I would appreciate you for your patience and doing the enormous work ahead. We are at the extreme of this growth by creating some of most up to date technologies in auto, energy and in artificial intelligence. Paving the way for the next journey of growth, your willingness will prove to be dependable in reaching the destination. “

Moreover, such reports claiming that some workers no longer have access to the system.

That being said, They don’t have an exact percentage of those who would be affected by this layoff. Let me just say that there would be more than 10% of the employees at Tesla. In other words, there would be at least 14,000 laid off employees, because it is being talked about up to 140,000 employees according to the total number of the employees at Tesla.

But unlike employees of other companies, Tesla employees won’t know if the layoffs will affect their team the most or least. We see Drew Baglino and Rohan Patel are not listed as Tesla team because they have lost the “Tesla-affiliated” badge on Twitter.

(Update: The truth is that both Baglino and Patel are no longer associates of the company (confirmed statement).

However, Baglino was still listed as Senior VP of Powertrain and Energy on Tesla’s site for a while after the email had gone out, but now it has been removed as well. Patel is the policy chief of Tesla, who in addition has served as a last minute Tesla PR department, commenting on news on Twitter on behalf of Tesla as the public relation department is still a figment of Tesla’s imagination.

Following the report of poor third-quarter performance, where Tesla was significantly short of the delivery estimates, and even recorded a rare year-over-year decrease in sales, the news comes as a shock. While Tesla does not describe sales by geographical region, the main drop appears to have been China, where domestic manufacturers are nurturing their local markets and expanding their export to other countries at a very fast pace.

Elon Musk’s brainchild, Tesla, will be giving out its quarterly profits report, which is set to be delivered next Tuesday, April 23. Given that Tesla’s profit for the first quarter of 2023 was $0.85 cents a share, analysts predict that the profit could be around 50 cents per share, leaving the company with $0.35 cents less profit.

Problems of Tesla:

There is this one thing of the Tesla that has always gun me is that it concludes that number of the employees in the company is more than enough not the bigger. It is as if there is a great number of issues that to go under the radar (both on a high and low tables –we do not only serve the owners of the most expensive models – the Tesla owners, have you ever had trouble getting a hold of someone in service?), and I believe that the reason for this is because Tesla employees are overworked. This leads to the other side of the coin, burnout and turnover, a lack of institutional memory and no one assigning problems that don’t get fixed.

The fact that Tesla could grow so large and quickly is much because of its start-up spirit, and the spirit that it is everyone on board to grow the company that is shaking up the automotive and energy doing the two largest sectors on earth. The fact that it has dented the products in the aforementioned sectors so far proves that this approach has already started with its sufficiency.

Moreover, this not only makes it easier for Tesla to hire, but there are a lot of companies who boast about how they are the ones slowly changing the world, while Tesla can actually and truthfully say that it is at the frontline of the automotive industry revolution. In my opinion, it’s correct that the best way to hire the smartest brains and more precisely upon Musk’s, keeping this company’s personnel stream stocked with such talents. However, nowadays, this recruitment advantage could become a weaker point given the bad habits that Musk is showing lately.

But the fact is that Tesla will be celebrating its 20th birthday this year. It is a huge and well established company. It’s still growing and immature, no well-grounded manger and a lower retention rate over the security of the team like. It is really a great way to decrease a mistake and to improve staff satisfaction at the same time.

Conclusion:

It appears that Tesla has been hit with some adverse event recently with the fall in outside sales and the latest employees’ dismissal. It’s an interesting time of trouble for the company, which gives me hope that they would find a way to pass through it. These listers have always been innovative and able to face challenges from whatever they confronted. Therefore, I’m confident to say that they’ll discover the way to overcome these hurdles. Let’s see if Tesla will continue to dominate the industry in the rest of its history!