Rama Krishna Sangem
Unbelievably, world famous EV (Electric Vehicle) maker Tesla too is facing sales decrease. As a result, The Elon Musk led company is forced to cuts its jobs by 10 per cent globally. Tesla is laying off more than 10 per cent of its global workforce, an internal memo seen by Reuters on Monday shows, as it grapples with falling sales and an intensifying price war for electric vehicles (EVs).
“About every five years, we need to reorganize and streamline the company for the next phase of growth,” CEO Elon Musk commented in a post on X. Two senior leaders, battery development chief Drew Baglino and vice president for public policy Rohan Patel, also announced their departures, drawing posts of thanks from Musk although some investors were concerned.
Musk last announced a round of job cuts in 2022, after telling executives he had a “super bad feeling” about the economy. Still, Tesla headcount has risen from around 100,000 in late 2021 to over 140,000 in late 2023, according to filings with US regulators.
Baglino was a Tesla veteran and one of four members, along with Musk, of the leadership team listed on the company’s investor relations website.
Tesla shares @ $ 161, down by 5.6 pc
Scott Acheychek, CEO of Rex Shares – which manages ETFs with high exposure to Tesla stock – described the headcount reductions as strategic, but Michael Ashley Schulman, chief investment officer at Running Point Capital Advisors, deemed the departures of the senior executives as “the larger negative signal today” that Tesla’s growth was in trouble.
Less than a year ago, Tesla’s chief financial officer, Zach Kirkhorn, left the company, fueling concerns about succession planning. Tesla shares closed 5.6 per cent lower at $161.48 on Monday. Shares of EV makers Rivian Automotive, Lucid Group and VinFast Auto also dropped between 2.4 per cent and 9.4 per cent.
“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 in the memo sent to all staff.
“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 per cent globally,” it said. This shows event the world’s tech giants too go for emergency measures when the situation is not comfortable. This doesn’t mean that Tesla will not pick up again after global conditions stabilize and increase its headcount.
