Tesla management told staff Monday that the latest layoffs, which cut certain departments by 20% and even struck good performers, were mostly due to poor financial performance, a source
Tesla employees were informed of the layoffs a week before its first-quarter results announcement. Tesla has seen its profit margin narrow over the past three quarters due to a year-long EV price battle. The business delivered 1.81 million vehicles in 2023, a record. Tesla's profitability suffered as it regularly lowered prices to boost sales and undercut competitors.
Tesla employees in the US, Europe, and China were warned that more than 10%, or 14,000 individuals, will be laid off. To prepare for its "next phase of growth," CEO Elon Musk sent an internal email to TechCrunch that explained the layoffs, which affected all divisions and seniority levels.
Top performers cut Two sources told TechCrunch on condition of anonymity that many laid-off workers were high performers. One source was shocked by Tesla's decision to lay off so many skilled workers, many of whom were working on lower-priority projects. The source did not name projects.
Sources say some divisions laid off more than 10% as stated in the companywide email. One manager told TechCrunch 20% of employees were laid go. "I lost 20% of my team, some really good players too," remarked. The change comes as Musk tries to steer the company toward self-driving automobiles. Tesla canceled plans to manufacture a $25,000 EV and instead used the infrastructure to power an alleged robotaxi Musk stated will debut August 8.
Walter Isaacson, Musk's biographer, says Musk tried to prioritize the robotaxi vehicle project. He told employees he wanted a "clean robotaxi" without pedals or steering wheel in 2022. Tesla head designer Franz von Holzhausen and engineering VP Lars Moravy secretly handled the low-cost EV project and urged Musk to produce both, until last week when Musk changed his mind.
Top executives depart Tesla lost two high-profile executives: SVP of Powertrain and Energy Drew Baglino and VP of Public Policy and Business Development Rohan Patel. Patel told TechCrunch he left Tesla Sunday night due to "[b]ig overall changes" at the company. Patel, who has been interacting with Tesla customers and admirers on X for months, declined to comment. He wrote, "Better for me not to speculate." "Tesla is going to be stronger than ever, and change is good," said.
Baglino told TechCrunch he will depart Tesla after 18 years. "I feel good about the impact I've been able to achieve, my leadership team is strong, the energy businesses I'm responsible for are doing well, etc.," he said in a "Baglino was in charge of powerdrives and new battery projects, and there's a sense that there isn't a whole lot of sustainable innovation at this point, which is probably why Baglino is leaving," Sandeep Rao, head of research at London-based Leverage
Zachary Kirkhorn, Tesla's former CFO, resigned a few months before Baglino. Musk stated on X, formerly Twitter, in January that he would like 25% voting control of Tesla to focus on the firm and assist it lead in AI and robotics.
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