Tesla Model S

Tesla CEO Elon Musk announced a fresh wave of layoffs at the electric car maker, with 10% of the overall workforce being impacted. The layoffs have also resulted in several key senior execs leaving the company, including several high perfoming employees, as per various media reports.

Musk announced the layoffs over an email, first reported by Electrek and Bloomberg. These layoffs would impact “more than 10%” of its global headcount, Musk said in the email. Tesla had over 140,000 employees at the end of 2023, which would mean a significant 14,000 being laid off. The number could actually be much higher as per several news reports, considering several employees have also put in papers on their own.

“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,” Musk said. Tesla’s growth, he said, has led to “duplication of roles and job functions in certain areas.”

The layoffs come just weeks after Tesla announced its recent quarter results, which showed a rare drop in year over year sales. The numbers came amid the background of an overall decline in the demand of EVs globally, specially premium ones offered by companies such as Tesla. And while the company initially had plans to launch a lower cost version, it recently scrapped that plan, further impact growth prospects among mass market buyers and developing markets globally.

“As part of this effort, we have done a thorough review of the organization and made the difficult decision to reduce our headcount by more than 10% globally. There is nothing I hate more, but it must be done. This will enable us to be lean, innovative and hungry for the next growth phase cycle,” Musk wrote.

Bloomberg  report suggests departure of key execs, most notably Senior Vice President Drew Baglino, who resigned. He had been with Tesla for over 18 years and was seen co-leading investor calls with Musk, including as recent as the last one. Rohan Patel, the carmaker’s vice president of public policy and business development has also resigned.