Over 5,000 jobs are being cut from Tesla’s main two work sites in California and Texas. About 3,300 jobs from the California office are being eliminated and about 2,600 jobs from Texas are being eliminated. This news comes according to the Worker Adjustment and Retraining Notification Act letters in which proper notices are required to be filed for both states. The California office is the former main corporate headquarters in Palo Alto. The Texas office is the new corporate headquarters in Austin. The layoffs are occurring as a part of the company’s restructuring program that was announced last week.
Last week, Elon Musk, CEO of Tesla, stated that they plan to cut approximately 10% of their staff worldwide.
Musk stated that they are having to cut staff due to a decrease in sales and an increase in competition in the electric vehicle market. In his official notice from WARN, he explained that in order for the company to continue to grow in the future, they have to cut back presently. He expressed that they would need to overall reduce their production costs and increase productivity which led him to the decision to lay off thousands of his employees. If Musk sticks to his word of eliminating 10% of his employees worldwide, there will be around 15,000 people who lose their jobs. As of December 2023, Tesla employed nearly 150,000 people.
In recent years, Tesla has been focused on expanding, which might have been its downfall.
For example, in 2021, they made a move to expand the Austin office to be the new corporate headquarters. Additionally, in 2022, they grew the Austin office even more when they officially opened the Texas EV and battery factory. When speaking about the Austin office and another large manufacturing plant in Germany, Musk called them “gigantic money furnaces.”
Not only did Tesla make these bad business expansions too early, but they likely did also not expect how public opinion would shift so vastly on their vehicles. The Tesla Cybertruck already had poor reception, and now with news of recalls already occurring less and less people are interested. Furthermore, there main Tesla model vehicles had a massive recall, leading people to lose interest in the vehicle. The news of this recall came at a time in which people were increasingly losing interest in the vehicle as more and more of the cons came out about them publicly.
