On April 15th while Americans were getting taxes in before the deadline, Elon Musk filed some documents of his own. Emails that announced a round of Tesla layoffs that impacted 10% of its workforce. This article lays out what we know about the situation so far…
These Significant Tesla Layoffs Were IMMEDIATE
Monday, Musk gave notice via memo — reported by Electrek — that the EV manufacturer would be cutting around 14,000 jobs…
EFFECTIVE AT THE END OF BUSINESS THAT DAY.
Workers were laid off from departments all across the Tesla organization — including sales and engineering.
Additionally, the discharged employees lost access to Tesla facilities at the same time. Then, information regarding severance packages and benefits would be sent to them within 48 hours.
Although this announcement feels abrupt, is it really surprising considering recent events?
What Tesla Says Prompted These Massive Layoffs
According to the aforementioned memo, the reason for the cuts was…
“WITH THIS RAPID GROWTH, THERE HAS BEEN DUPLICATION OF ROLES AND JOB FUNCTIONS IN CERTAIN AREAS. 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.”
However, another set of factors must be acknowledged as well.
First and foremost, the $80 billion loss in market value to competition the company experienced last February.
Second, the 20% decline in vehicle deliveries — which will surely be made worse by these layoffs.
Then, the ongoing backlash from regulators regarding its Autopilot self-driving technology.
Legal battles continue regarding fatalities in the vehicles in which this software was used.
On top of all that, two major Tesla executives resigned the same day as the layoffs.
Senior vice president for powertrain and energy, Drew Baglino…
And, policy and business developer, Rohan Patel.
Subsequently, what is the fate of an industry when its trailblazers begin to falter…
Are Investors and Consumers Falling Out of Love with EVs?
Technically, the sales of electric vehicles are up overall. Nonetheless, those quarterly increases are lower and lower.
AND CONSUMERS ARE CHOOSING NOT TO BUY FROM TESLA.
Similarly, investors are putting their capital into other companies with less inflammatory CEOs.
These sentiments are reflected in a Caliber survey which measured public opinion of the brand. It showed its consideration score was down to 31% this year from 70% in 2021.
Regardless, Tesla is another example of recent tech layoffs that foreshadows change — whatever that will be.
Be Great,
GCTV Staff
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