Yahoo Finance Tesla Announces Steep Employee Cuts Amid Revenue Drop
Elon Musk’s Tesla announced Tuesday that it plans to lay off 6,020 employees in a massive round of cuts as the electric vehicle company weathers its biggest revenue drop in more than a decade.
The layoffs were revealed in federally required announcements about workforce reductions, known as WARN notices. According to the filings, Tesla plans to strike 2,688 jobs from its Austin, Texas, headquarters and 3,332 jobs in California.
The notices became public the same day Tesla held its quarterly earnings call with investors, revealing a 9% drop in first-quarter revenue year-over-year that marks its biggest decline since 2012. The call happened days after the company recalled thousands of its Cybertrucks over concerns accelerator pedal pads may dislodge and stick, potentially causing the $100,000 vehicles to crash.
Amid the news, Musk boasted on X, which was known as Twitter until he bought it in 2022, about Tesla creating 30,000 manufacturing jobs in California over the past 14 years.
Tesla has now created over 30,000 manufacturing jobs in California! https://t.co/jjFX4FVlM2
— Elon Musk (@elonmusk) April 23, 2024
Musk informed his workforce about the planned layoffs last week in a memo obtained by CNBC and Electrek.
“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.
“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,” he said.
Tesla’s stock price dropped by about 5% that day.
But share values surged more than 10% following Tuesday’s earnings call, on which Musk told investors that Tesla’s highly anticipated, more affordable electric vehicle models were on track to begin production early next year ― sooner than the company initially promised.
