(April 16, 2024) Tesla plans to lay off more than 10 percent of its worldwide workforce, multiple news organizations reported on Monday, citing an internal memo. The company told managers to identify critical team members, and paused some stock rewards while canceling some employees’ annual reviews, according to the report, which added that the company also reduced production at Gigafactory Shanghai.

The world's largest automaker by market value had 140,473 employees globally as of December 2023, according to its latest annual report. The reported cuts will affect about 15,000 workers.

"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," Elon Musk said in the memo. "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.

And in another sign of instability at the EV maker, Tesla's senior vice president Drew Baglino, in charge of battery development, announced his resignation on X on Monday. Bloomberg reported that Rohan Patel, vice-president for public policy and business development, had also resigned.

Their departures "signal that Tesla's major growth phase is meeting serious headwinds," said Michael Ashley Schulman, chief investment officer at Running Point Capital Advisors, deeming it "the larger negative signal today" than the announcement of job cuts.

Source: Reuters