Tesla has seen a turbulent couple of months and it is resorting to a restructuring. After not reaching its expected goals in the last quarter, a memo was released stating that the company would be reducing its workforce by about 10%.
Tesla Workers in Buffalo, New York
The reduction in workforce by 10% will affect approximately 14,000 globally, and it appears that 285 of those employees will be laid off from its Buffalo arm. According to the notice the company filed, it was part of a broader restructuring which will help with the "next phase of growth."
Most of the workers impacted by the job cuts worked at the Tesla Buffalo factory while the others were stationed at a store and service center in the area. With the number of employees laid off, 14% of the total workforce in Buffalo is affected, as per CNBC.
The company-wide email stated that with the rapid growth of the company as it built multiple factories worldwide, there has been "duplication of roles and job functions in certain areas." With that said, Tesla is looking into ways that the company can reduce costs and increase productivity.
"There is nothing I hate more, but it must be done. This will enable us to be lean, innovative and hungry for the next growth phase cycle," Elon Musk expressed regarding the layoffs. "I would like to thank everyone who is departing Tesla for their hard work over the years."
It appears that executives in the company are not safe from the reduction of workforce as well. Drew Baglino and Rohan Patel, who used to work as Senior VP of Powertrain and Energy and Policy Chair, respectively, no longer had their "Tesla-affiliated" badge on X.
According to Electrek, it was confirmed that both no longer worked in the company. The two executives have already been removed from the company's website. For now, Baglino and Patel are the only high-level employees that we cut from the company.
Tesla's Drop in Quarterly Deliveries
In the quarterly report that the company released, it shows that Tesla saw a drop in delivery for the first time in four years. By March 31st, it only delivered 386,810 vehicles within three months, which is a 20.2% drop from the previous quarter's 433,371 vehicles.
Wall Street expected the EV maker to deliver 454,200 vehicles. With Tesla missing its mark, Tesla shares fell by 5.7% in early trading, which added to the almost 30% decrease in value so far this year, as mentioned in The Economic Times.
Another factor that could've contributed to bad business is the rising competition in the EV industry. While Tesla once dominated the market, there are now established companies that are looking into EV manufacturing as well.
One of the competitions to look out for is BYD from China. For a time, it surpassed Tesla as the largest EV maker in the fourth quarter, although Tesla managed to bounce back. Tesla delivered 369,783 Model 3 and Model Y, and about 17,000 units of other models.
