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Electric vehicle manufacturer Tesla eliminated 14,000 employees, over 10% of its workforce, in a round of global job cuts on Sunday.
CEO Elon Musk emailed workers who had their jobs cut in a memo at around Midnight Pacific Time.
In the memo, first reported by Electrek, Musk attributed the need for layoffs to the “duplication of roles and job functions in certain areas,” following what he describes as a rapid period of growth at factories across the globe.
“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,” he wrote.
Like other big tech giants, Tesla appears to have suffered from overly confident post-pandemic, with the economic landscape not as positive as first expected by many executives.
Musk’s hope is for the layoffs to spur the electric vehicle company to greater productivity and performance, saying they will “enable us to be lean, innovative and hungry for the next growth phase cycle.”
Earlier in 2024, Tesla reportedly asked managers to note down any business-critical roles and paused performance reviews.
Those affected had their access to company systems immediately shut off. The email accompanying the memo informed those being laid off that, effective immediately, they “will not need to perform any further work and therefore will no longer have access to Tesla systems and physical locations.”
In the memo, Musk thanked his departing staff.
“There is nothing I hate more, but it must be done,” he said. “I would like to thank everyone who is departing Tesla for their hard work over the years. I'm deeply grateful for your many contributions to our mission and we wish you well in your future opportunities. It is very difficult to say goodbye.”
Musk concluded with a call to arms for the employees who remain. “I would like to thank you in advance for the difficult job that remains ahead… As we prepare the company for the next phase of growth, your resolve will make a huge difference in getting us there.”
The notorious CEO also took to X to suggest that such layoffs are an inherent part of Tesla’s business plan. “About every five years, we need to reorganize and streamline the company for the next phase of growth,” he wrote.
The embattled car maker has had to deal with its fair share of difficulties over the past few months.
Beyond a slowdown in demand within the electric vehicle industry, Tesla has faced criticism as its executive pay for the past five years reached $2.5billion and the fallout of a racial bias lawsuit by 6,000 Black staff.
