Tesla lays off more than 10% of its workforce

Tesla intends to lay off more than 10% of its global workforce in the electric car sector.

In a memo, first published on news site Electrek, billionaire owner Elon Musk told employees there was nothing he hated more, “but it has to be done.”

The world's largest automaker by market value had 140,473 employees globally as of December, according to its latest annual report.

Tesla did not respond to the BBC's request for comment.

“We have conducted a comprehensive review of the organization and have made the difficult decision to reduce our headcount by more than 10% globally,” the email from Mr Musk said.

“There's nothing I hate more, but it has to be done. This will enable us to be lean, innovative and hungry for the next growth phase cycle.”

One Tesla employee, who was told he would be made redundant, told the BBC that he was subsequently blocked from accessing his emails, and all other employees were also laid off.

One member of the executive team, Andrew “Drew” Baglino, said in a post on X (formerly Twitter) on Monday that he had made the “difficult decision” to leave the company after 18 years.

Another executive heading public policy and business development, Rohan Patel, is also set to leave.

He personally thanked Mr. Musk for giving him the opportunity and “empowering” him to lead major initiatives at the company.

He also said that the “never-say-die attitude and fun-loving attitude” of the wider Tesla team is what he believes has made it a special place to work.

Their departures “suggest Tesla's key growth phase is facing serious headwinds,” said Michael Ashley Shulman, chief investment officer at Running Point Capital Advisors, calling it a “bigger negative signal today” than the announcement of the job cuts.

However, analysts from Gartner and Hargreaves Lansdowne said the cuts were a sign of cost pressures as the automaker invested in new models and artificial intelligence.

The electric vehicle (EV) maker has been slow to update its older models as high interest rates have sapped consumers' appetite for expensive goods.

The company is scheduled to report its quarterly earnings later this month, but has already reported a decline in vehicle deliveries in the first quarter, the first in nearly four years and also below market expectations. Some analysts described the results as “noisy.”

Last month, Tesla reduced production at its Gigafactory in Shanghai, and last week Tesla told employees who work on the Cybertruck that shifts would be shorter on the production line in Austin.

Tesla is starting to feel the impact of slowing demand for electric vehicles.

Elon Musk recently denied reports that the company had scrapped plans to produce an inexpensive car, which was one of his long-term goals to make affordable electric cars for the masses.

Tesla shares fell 0.8% in pre-market trading on Monday.