Tesla is reportedly due to lay off over 14,000 employees, around 10 per cent of its workforce, as it aims to shed weight ahead of a new phase of growth.
Billionaire Tesla boss Elon Musk said he had made “the difficult decision to reduce our headcount by more than 10% globally”, in a memo first reported by the online publication Elektrek.
Tesla employs 140,473 people, according to its annual report from December 2023.
In an internal email, seen by Elektrek, Musk wrote: “There is nothing I hate more, but it must be done. This will enable us to be lean, innovative and hungry for the next growth phase cycle.”
He said the company, which manufactures electric vehicles, had expanded fast in recent years leading to a “duplication of roles and job functions in certain areas”.
“As we prepare the company for our next phase of growth, it is extremely important to look at every aspect of the company for cost reductions and increasing productivity.
“As part of this effort, we have done a thorough review of the organization and made the difficult decision to reduce our headcount by more than 10% globally,” the memo said.
Tesla is slipping behind its big tech rivals, having largely failed to meet analyst forecasts and due to increasing competition from rivals such as Chinese automotive firm BYD.
With a market cap of more than $530bn (£425bn), the US stock has fallen 32 per cent since the start of the year.
It recently posted a drop in quarterly deliveries of its electric vehicles for the first time in four years, slipping far south of estimates. The EV maker missed the consensus Wall Street estimate of 449,080 deliveries by more than 62,000, its largest margin to date.
Production issues have also plagued Musk’s Cybertruck, which is yet to turn a profit.
City A.M. has approached Tesla for comment.