Tesla has made significant reductions in its workforce this year, cutting at least 14% of its global headcount compared to the end of 2022. According to internal company records, Tesla’s worldwide headcount now exceeds 121,000 employees, including temporary staff. This figure is based on the number of people on Tesla’s “everyone” email distribution list as of June 17, when Tesla CEO Elon Musk sent out a company-wide email.
Background and Details
- Layoff Announcement: In April, Musk announced a plan to cut more than 10% of Tesla’s workforce via a company-wide email. At that time, Bloomberg reported that Musk’s target was a 20% reduction, which could potentially be even larger.
- First-Quarter Earnings Call: During the first-quarter earnings call in April, Musk stated that Tesla had reached inefficiency levels of 25% to 30% after a prolonged period of growth that began in 2019. He mentioned the need to restructure for the next phase of growth.
- Employee Count: At the end of December 2022, Tesla reported a global workforce of 140,473 employees. The current figure of approximately 121,000 suggests a reduction of more than 14% since the beginning of the year.
- Performance-Based Awards: Musk’s email on June 17 also mentioned that Tesla would conduct a review to allocate stock options for exceptional performance, indicating a resumption of previously halted performance-based awards.
Specific Instances and Broader Impact
- Supercharging Team: In at least one instance, the reduction efforts went too far, leading to the disbandment of Tesla’s Supercharging team, including its leader Rebecca Tinucci. Some employees from this team were later rehired.
- Revenue Decline: These layoffs come at a challenging time for Tesla, which is dealing with an aging electric vehicle lineup, increased competition in China, and a declining brand reputation due to Musk’s public behavior. Tesla reported a 9% revenue decline in the first quarter, the biggest drop since 2012.
