Elon Musk, the CEO of Tesla, reportedly considered reducing his company’s workforce by one-fifth in response to declining vehicle deliveries. The reduction was meant to align with the 20.1% drop in quarterly vehicle deliveries for the company. In the first quarter of 2024, Tesla delivered 386,810 cars, marking its lowest quarterly performance since 2022.
Musk’s plan to cut the workforce by 20% was revealed in a memo to staff, where he stated that the company needed to eliminate duplication of roles and job functions due to rapid global growth. Before the layoffs, Tesla employed more than 140,000 people worldwide.
In addition to facing a decline in sales, Tesla is also experiencing increased competition from Chinese car companies like BYD. Musk had previously acknowledged Chinese automakers as “the most competitive car companies in the world.”
These challenges have raised concerns about Musk’s ability to manage multiple business ventures simultaneously. In addition to leading Tesla, Musk is involved in other projects such as SpaceX, The Boring Company, Neuralink, X, and xAI. Despite this, Musk has emphasized that the layoffs were necessary for Tesla to remain innovative and poised for growth in the future.
Representatives for Tesla have not yet responded to requests for comment regarding the reported layoffs.
