Tesla, a leading global manufacturer of electric vehicles, has initiated a significant reduction in its workforce,” tech publication Electrek reported on May 6. The layoffs impact the software, service, and engineering departments, signaling a major shift in the company’s operational strategy.
Also Read | Tesla Layoff: Elon Musk’s EV maker to lay off 693 employees in Nevada after cars price cuts
The Elon Musk-owned Tesla previously announced it plans to lay off over 6,700 employees across its various locations, including Texas, California, Nevada, and New York. The decision comes as the company faces numerous challenges, such as declining sales and an intensified price war among automakers, exacerbated by high-interest rates dampening the adoption rate of electric vehicles.Ā
According to internal emails obtained by Electrek, Tesla communicated these changes to its employees over the weekend, suggesting a major organizational reshuffle is underway. “We are streamlining our operations to enhance our efficiency,” a Tesla spokesperson said, reflecting the company’s strategic adjustments.
Also Read | Tesla layoff: Elon Musk’s ex-employee left in disbelief after termination: āSlept in car to avoidā¦ā
In a surprising contrast to the layoffs, Tesla’s shares increased by more than 1% on Monday. However, the company has yet to respond to a Reuters request for comment regarding the layoffs.
Also Read | Tesla’s restructuring hits executive bench hailed by Elon Musk
“Tesla is reallocating resources towards the development of autonomous driving software, robotaxis, and our humanoid robot, Optimus,” noted an industry analyst. This strategic pivot may involve cutting expenditures in other areas to conserve cash for these high-potential projects.
Moreover, Tesla disclosed last month that it anticipates incurring over $350 million in costs related to these mass layoffs in the second quarter. The restructuring also led to the departure of several top executives, including Drew Baglino, Rohan Patel, Rebecca Tinucci, and Daniel Ho.
In an effort to manage its investments more efficiently, “Tesla is developing new models that will utilize existing platforms and production lines,” the company announced in April. This approach is expected to control capital expenditures more effectively during a turbulent time for the automaker.
(With Inputs from Reuters)
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Published: 07 May 2024, 03:22 PM IST
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