Massive wave of layoffs at Tesla

Tesla could soon eliminate up to 10% of its global workforce, or nearly 14,000 jobs.

Tesla is drastically reducing its global workforce. This is not a nasty rumor but the words of Elon Musk in an email addressed to his staff, as the car manufacturer grapples with a slowdown in electric vehicle demand. The CEO cited the need to cut costs in a note revealed by Bloomberg. “As we prepare the company for our next phase of growth, it is extremely important to examine all aspects of the business to reduce costs and increase productivity,” Musk wrote in this email. “As part of this effort, we conducted a thorough review of the organization and made the difficult decision to reduce our workforce by 10% globally. There is nothing I hate more, but it must be done.” If reductions apply to the entire company, layoffs will represent more than 14,000 employees…

Tesla is still a mix of highs and lows without much logic. After celebrating throughout 2023 with record sales, the manufacturer finds itself in a difficult position at the start of 2024 facing its first quarterly sales decline in four years. Several analysts expect a downward trend throughout the year, citing slow production of the Cybertruck and a pause in the rollout of new products.

The human is becoming less and less useful

Tesla had 140,500 employees as of January 1, 2024, a workforce that has doubled in just three years. The development of the Berlin Gigafactory is certainly a significant factor with 12,000 employees.

After a total euphoria, the stabilization of the electric market is a reality faced by all manufacturers. Economic Darwinism dictates that some have disappeared while others like Fisker struggle for survival. However, it would be excessive to speak of a recessionary market since demand remains strong and the transition continues to be supported by all governments with substantial aid. There is another factor well illustrated by Musk’s recent request to Tesla managers to determine whether each employee’s position is critical. Once production of a new model is launched, it gradually automates, reducing the need for human labor. All models currently marketed by Tesla are in this specific situation.