Shares of Tesla Motors are muted in the early premarket trading hours in New York after a report from the EV blog Electrek cited an "internal company-wide email" detailing layoffs at the EV company amounting to more than 10% of its global workforce.
Electrek alleges that Elon Musk sent an email to staff explaining a "duplication of roles and job functions in certain areas" as the main reason for the layoffs, which could affect as many as 14,000 employees.
Here's the full text of the email (courtesy of Electrek):
Over the years, we have grown rapidly with multiple factories scaling around the globe. With this rapid growth there has been duplication of roles and job functions in certain areas. 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.
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.
I would like to thank everyone who is departing Tesla for their hard work over the years. I'm deeply grateful for your many contributions to our mission and we wish you well in your future opportunities. It is very difficult to say goodbye.
For those remaining, I would like to thank you in advance for the difficult job that remains ahead. We are developing some of the most revolutionary technologies in auto, energy and artificial intelligence. As we prepare the company for the next phase of growth, your resolve will make a huge difference in getting us there.
Thanks,
Elon
The latest data from Bloomberg shows that Tesla has around 140,000 employees, nearly double the 2020 level.
Electrek noted, "We don't know which specific teams will be most or least affected by Tesla's layoffs."
The alleged layoffs come after the company recorded its first quarterly decline in four years and delivered 386,810 vehicles in the first quarter, far below the Bloomberg consensus of 449,000.
Slowing EV demand has weighed on Tesla shares this year, down 31%, and one of the worst performers in the S&P 500 Index.
As Bloomberg notes, the EV slowdown has hit other automakers:
The EV slowdown Tesla has felt of late has been widespread. China's BYD Co. delivered just 300,114 battery-electric vehicles in the first quarter, down 43% from the final three months of last year, when it briefly pulled ahead as the world's top EV seller. Manufacturers including Volkswagen AG, General Motors Co. and Ford Motor Co. have delayed, dialed back or altogether scrapped EV projects as consumers balk at still-high prices and a dearth of charging stations.
On Tesla's most recent earnings call, Chief Financial Officer Vaibhav Taneja said, "We just have to chase down every penny possible."
Tesla will report next Tuesday, April 23. Wall Street analysts expect the company to turn a profit of about 50 cents a share, down from around 85 cents a share in the first quarter of 2023.
If Electrek's report is correct, Elon appears to be tightening Tesla's belt, suggesting broader troubles are ahead for the US economy.
