Tesla to lay off more than 10% of its staff, Electrek reports

Tesla to lay off more than 10% of its staff, Electrek reports

(Reuters) – Tesla will lay off more than 10% of its workforce, tech publication Electrek reported on Monday, citing an internal memo.

Tesla 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 firm also reduced production at Gigafactory Shanghai.

A Tesla electric vehicle undergoes electronic equipment testing before delivery at Tesla’s Shanghai Gigafactory. (Fang Zhe/Xinhua via Getty Images) (Xinhua News Agency via Getty Images)

The world’s largest auto-maker 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.

Tesla did not immediately respond to a request for comment.

Tesla, which is set to report its quarterly earnings on April 23, reported a decline in vehicle deliveries in the first quarter, its first in nearly four years and also below market expectations.

Meanwhile, the company has scrapped plans to produce an inexpensive car, abandoning one of Musk’s longstanding goals to make affordable EVs for the masses.

Tesla shares were down 0.6% in premarket trading on Monday.

After years of rapid sales growth that helped turn Tesla into the world’s most valuable automaker, the company is bracing for a slowdown in 2024.

The EV maker has been slow to refresh its aging models as high interest rates have sapped consumer appetite for big-ticket items, while rivals in China, the world’s largest auto market, are rolling out cheaper models. (Reporting by Yuvraj Malik in Bengaluru; Editing by Anil D’Silva)