Tesla last week issued sweeping layoffs which tanked its stock and confirmed analysts’ assertions that the company is struggling with low demand.
But Elon Musk wanted to fire even more workers, Bloomberg News reports.
Musk on April 15 informed staff that “more than 10%” of Tesla’s 140,000-worker global headcount would be laid off, citing a “duplication of roles and job functions in certain areas.” In other words, at least 14,000 workers lost their jobs.
“There is nothing I hate more, but it must be done,” the Tesla CEO wrote to staff. “This will enable us to be lean, innovative and hungry for the next growth phase cycle.”
However, Bloomberg reports that the layoffs may have affected more people than previously believed. More than 20,000 people may have been laid off, people familiar with the company’s planning told the publication.
And a person with direct knowledge of Musk’s discussions told Bloomberg that he had wanted to slash Tesla’s workforce by 20%. That percentage, Musk reasoned, would match Tesla’s sales decline between the fourth quarter of 2023 and the first quarter of 2024.
Earlier this month, Austin, Texas-based Tesla said it delivered 386,810 electric vehicles over the first three months of 2024, down from 484,507 units sold between October and December. The drop in performance was Tesla’s lowest quarterly showing since 2022. Last quarter also marked Tesla’s first year-over-year decline since the second quarter of 2020.
“[T]he sweeping layoffs announced yesterday, amounting to a reduction in crewed production capacity, should now leave no doubt that the decline in deliveries has been a function of lower demand and not supply,” JPMorgan analysts wrote last week.
Over the weekend, Tesla slashed prices across several of its major markets — including China, Germany, and the U.S. — to combat the slowed sales and increased competition in China. The cuts primarily affect the Model 3 and Model Y, which make up the bulk of the company’s deliveries.
Tesla stock dropped more than 3% in trading Monday to almost $142 per share. The stock sank as low as $138.80, marking the company’s latest 52-week low just one day before the company reports its full first-quarter earnings.