In the current article, we discuss Tesla’s global job cuts, which include reducing staff in the U.S. and China, the automaker’s two biggest markets, across sales, tech, and engineering. CEO Elon Musk informed the company’s staff through an internal memo that they would be laying off more than 10% of their global workforce, as a response to falling sales and an intensifying price war for electric vehicles.
Tesla’s Layoffs in the U.S.
Several U.S.-based service centers experienced heavy layoffs, primarily affecting sales staff and technicians. In one location, all front-of-house staff were laid off. Additionally, a spreadsheet was posted on LinkedIn by a Tesla program manager in California, listing over 140 staff, mostly engineers, who had been laid off and were seeking new jobs.
Layoffs in China
Members of Tesla’s China sales team were being notified of their redundancy, with more than 10% reportedly losing their jobs. In Shanghai, the location of Tesla’s largest plant, the company is said to only be laying off “several dozen” people.
Response from Tesla Germany
Tesla Germany refuted reports in German media that 3,000 of the carmaker’s roughly 12,000 staff had been fired. They stated that they were evaluating how to implement Musk’s orders at the plant, ensuring compliance with labour laws and co-determination requirements.
Union Concerns in Germany
German union IG Metall criticized Tesla for not informing or consulting the works council, as is customary in Germany, prior to notifying all staff about the layoffs. While German labour law has strict rules on firing staff, about 1,000 workers at the plant are on temporary contracts, making them more vulnerable to dismissal.
Challenges Facing Tesla
Tesla is facing increasing competition in China, particularly in a price war with rivals like BYD. Sales in the United States have also slowed, coupled with high investment costs in new models and artificial intelligence. Despite price cuts in the first quarter, global vehicle deliveries fell for the first time in nearly four years.
In conclusion, Tesla’s global job cuts reflect the challenges the company is facing in various markets. The layoffs in the U.S. and China, as well as the response from Tesla Germany and concerns from German unions, highlight the complexities involved in reducing staff. Moving forward, Tesla will need to navigate these challenges carefully to ensure sustainable growth and success in the competitive electric vehicle market.