Tesla, the American electric vehicle giant, is facing a challenging start to 2024 with the company laying off more than 14,000 employees, representing almost 10% of its workforce. The company, which employs about 140,000 people globally, began the layoffs last month, which included high-profile figures such as Rebecca Tinucci, head of the electric vehicle charging division, and her entire team of 500 people.
The layoffs come at a time when Tesla is experiencing a notable decrease in sales of its electric cars compared to the previous year, indicating a potential increase in competition within the sector. The company’s management is now faced with the decision of focusing on affordable electric vehicles or investing in ‘robotaxis’ technology.
According to reports, former employees who were laid off criticized Tesla for the cold and distant tone of their dismissal letters, lacking empathy in handling the delicate situation. The communication of the terminations was described as extremely sterile, with the company notifying employees that no alternative positions were available, leading to their separation from Tesla.
As Tesla struggles to maintain its leadership in the electric vehicle market, CEO Elon Musk has taken drastic cost-cutting measures, including eliminating executive positions. Musk has expressed his desire to reduce at least 20% of Tesla’s workforce in an effort to refine the company’s composition and improve efficiency.
Despite the challenges, Tesla has significantly reduced the number of new job openings, with only three positions currently available on its job board. The most affected areas include the Supercharger division and the public policy team, with summer internship offers also being revoked weeks before their start.
As more manufacturers enter the electric vehicle market, companies like Tesla must adapt not only in terms of product but also in how they manage their workforce. Musk believes that being “absolutely tough” with the cuts is necessary for the company to maintain its competitiveness and financial stability in the evolving industry.