Tesla is laying off thousands of employees as it tries to simultaneously cut costs and boost productivity, according to an internal email sent to staff by CEO Elon Musk, Electrek and Bloomberg News reported. Drew Baglino, one of the company’s highest-ranking executives, has also left the company, according to Bloomberg.
The electric automaker is cutting “more than 10%” of its global headcount, Musk said in the email. Tesla finished 2023 with over 140,000 employees, meaning the cuts could impact more than 14,000 people.
The layoffs come just two weeks after Tesla reported its first year-over-year drop in sales in three years, amid a wider cooling of demand for EVs. The company has warned investors that sales growth could be “notably lower” in 2024 than its stated goal of 50% growth each year. It’s also somewhat in between product cycles for the first time in years, with the expensive Cybertruck only just recently going into production and the popular Model Y entering its fourth year without any significant updates.
“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,” Musk said in the email. Tesla’s growth, he said, has led to “duplication of roles and job functions in certain areas.”
“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. 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,” Musk wrote.
Baglino’s departure is the second time a top executive has left the company in the past year, as Tesla CFO Zachary Kirkhorn stepped down in August 2023. Baglino oversaw engineering for the company’s powertrain and battery technologies. He also had become one of the more responsive executives on Musk’s social media platform, X.
Tesla shipped a record 1.8 million EVs in 2023. But the company spent much of the year slashing prices on its most popular models in an effort to counterbalance the impact of high interest rates and increased global competition. The company has also reportedly dropped — or at the very least, delayed — plans to build a lower-cost EV that would retail starting at around $ 25,000, opting instead to use the underlying platform being developed to power an alleged robotaxi that Musk said will debut on August 8.
This story and headline have been updated to include news of Drew Baglino’s departure.
