Tesla layoffs: More than 10% of global staff to lose jobs amid declining sales

Global electric vehicle (EV) giant Tesla is set to lay off over 10% of its workforce amid declining sales, reported tech publication Electrek.

"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," reported the publication, citing CEO Elon Musk's statement in the internal memo.

The report indicated that Tesla instructed managers to identify critical team members and paused certain stock rewards, while also canceling some employees' annual reviews.

Additionally, production at Gigafactory Shanghai has been scaled back.

As of December 2023, Tesla had approximately 140,473 employees globally. The fresh layoffs are expected to affect around 15,000 workers.

Tesla has not yet commented on the potential layoffs.

The announcement comes as Tesla prepares to release its quarterly earnings on April 23.

The company recently experienced a decrease in vehicle deliveries in the first quarter, marking its first decline in nearly four years and falling below market expectations.

Meanwhile, in a significant shift, Tesla has abandoned plans to produce an affordable car, a departure from CEO Elon Musk's longstanding goal of making electric vehicles accessible to the masses.

Tesla shares saw a 0.6% decline in premarket trading on Monday.

After experiencing rapid sales growth in previous years, the company is now anticipating a slowdown in 2024.

Factors contributing to this include Tesla's delayed updates to its existing models and decreased consumer demand due to high interest rates.

Additionally, competitors in China, the world's largest auto market, are introducing more affordable alternatives.