In the US, Tesla’s sales are experiencing a slowdown. Concurrently, the company is incurring substantial investment costs for the development of new models and advancements in artificial intelligence. Amidst these financial pressures, Tesla has announced a layoff, affecting its workforce. These Tesla Layoffs have affected the employees economically.
According to five people briefed on the topic, Tesla is cutting jobs globally, including in sales, technology, and engineering. The automaker’s two largest markets are the United States and China.
An internal memo was obtained by Reuters on Monday. In it, CEO Elon Musk informed Tesla employees. The memo stated that the company is laying off over 10% of its global workforce. This decision is due to declining sales. Additionally, there is growing competition in the electric vehicle market.
One source reports that several U.S.-based service centers have implemented significant layoffs. These layoffs primarily affect technicians and sales employees. The insider claimed that another site fired every member of the front desk crew.
Tesla Layoffs In USA and China
A spreadsheet was shared on LinkedIn. It listed more than 140 employees. The majority of these employees were engineers. They had been laid off from Tesla. These individuals were seeking new employment. A Tesla program manager in California posted the spreadsheet.
Two individuals reported on Tesla’s situation. One of them claimed that the company’s China sales team is facing more than a 10% job cut. They revealed that Tesla is actively notifying its employees about the layoffs.
According to a third source, Tesla plans to let off only a limited number of employees in Shanghai, the location of its largest plant—roughly “several dozen” personnel.
Tuesday’s premarket trade saw a 2.5% decline in Tesla shares. Monday’s close saw a 5.6% decrease.
Tesla’s China branch and U.S. headquarters did not immediately answer requests for comments. The sources declined to be identified because they were not permitted to interact with the media.
The municipal governments in Beijing and Shanghai did not immediately respond to feedback requests.
Tesla Layoffs in Germany
Tesla Germany has denied claims by German media. The claims suggested that 3,000 out of 12,000 employees had been laid off. The company is currently assessing how to implement Elon Musk’s directives at the factory.
Tesla Germany sent an email to Reuters on Tuesday. The company stated it will implement measures at the Gigafactory Berlin-Brandenburg. These measures will be in line with labor law and co-determination requirements. The process will involve the works council. The company has not yet informed any workers about these measures.
The German union IG Metall claimed on Monday that Tesla had emailed every employee without first notifying or consulting the works council, as is normal in Germany.
German labor law strictly prohibits the termination of employees. However, a knowledgeable source claims that 1,000 employees at the plant hold temporary contracts. These contracts make them more vulnerable to termination.
Tesla is facing a number of challenges, including dwindling sales in the US, hefty investment expenditures in new models and artificial intelligence, and growing rivalry in China in a bitter price battle with rivals lead by BYD.
For the first time in over four years, there was a decline in global car deliveries in the first quarter as price reductions did not increase demand.
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