Tesla, the electric automaker, is implementing job cuts globally, affecting both the United States and China. These two countries are Tesla’s largest markets, making this move significant for the company’s operations. The reduction in staff will impact various departments, including sales, tech, and engineering.
The decision to lay off employees comes as Tesla faces challenges such as falling sales and an intensifying price war in the electric vehicle market. In an internal memo, CEO Elon Musk informed employees that more than 10% of the global workforce would be let go.
While specific details about the job cuts in the United States remain scarce, some U.S.-based service centers have already witnessed significant layoffs, especially among sales staff and technicians. In certain locations, all front-of-house staff have been laid off as well. A program manager in California even shared a spreadsheet on LinkedIn, listing over 140 employees, mostly engineers, who had lost their jobs and were seeking new opportunities.
In China, where Tesla has a strong presence and its largest production plant, the layoff news is affecting the sales team. It is estimated that more than 10% of the China sales team will lose their jobs. However, these cuts will not be as extensive in Shanghai, with only a small proportion of employees being let go.
Tesla’s headquarters in the U.S. and its China unit have yet to comment on the job cuts. The local governments in Shanghai and Beijing were also not available for immediate comment. It is important to note that all sources providing information for this report preferred to remain anonymous due to restrictions on speaking with the media.
In Germany, reports circulated suggesting that 3,000 out of Tesla’s approximately 12,000 employees had been fired. However, Tesla Germany denied these reports and stated that they are still evaluating how to implement Musk’s orders at the plant. The company assured that they will adhere to labor laws and consult with the works council, responsible for representing employee interests.
However, German union IG Metall criticized Tesla for not consulting with the works council before sending the job cut emails to all staff. While German labor laws have stringent regulations regarding firing employees, approximately 1,000 workers at the plant are on temporary contracts, making them more vulnerable to job loss.
The challenges faced by Tesla include stiff competition in China, where rivals like BYD are engaged in a fierce price war. Furthermore, sales in the United States have slowed down, and the company is grappling with high investment costs related to new models and artificial intelligence. These factors, combined with the failure of price cuts to stimulate demand, have led to a decline in global vehicle deliveries in the first quarter for the first time in nearly four years.
Overall, Tesla’s job cuts reflect the company’s efforts to tackle various challenges and reposition itself in the highly competitive electric vehicle market. These developments may have a significant impact on both employees and the company’s operations in key markets like the United States and China. As Tesla navigates these changes, it remains to be seen how it will adapt and solidify its position among competitors and address the evolving demands of consumers worldwide.
