Tesla will lay 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.Visitors check a Tesla Model 3 car displayed at a showroom of the U.S. electric vehicle maker in Beijing on Feb. 4, 2023.
"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," Tesla CEO Elon Musk said in the memo."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.
Still, Pedro Pacheco, vice-president of research and automotive at Gartner, said the cuts could simply be a sign of the company trimming costs ahead of releasing new models, as sales slow down from the strong growth propelled by the launch of the Model Y and Model 3. Reuters reported this month that Tesla had cancelled a long-promised inexpensive car that investors have been counting on to drive mass market growth. Musk denied the report, but did not identify any specific inaccuracies.