In a recent email to Tesla staff, CEO Elon Musk underscored that the company’s recent layoffs represent just the initial phase of a broader restructuring initiative. This announcement arrived as part of a series of organizational changes aimed at optimizing Tesla’s operations and enhancing efficiency.
Two senior executives, Rebecca Tinucci, Tesla’s senior director for charging infrastructure, and Daniel Ho, director for vehicle programs and new products, were among those departing from the company. Their divisions are set to be dissolved, with approximately 500 employees from Tinucci’s division facing job cuts. While only a select few will be reassigned, the majority will be part of the layoffs, as reported by The Information, which cited Musk’s email.
Moreover, Tesla’s public policy team is also slated for dissolution, following the earlier departure of vice president Rohan Patel on April 15. Musk expressed a commitment to streamlining Tesla’s leadership structure further by requesting resignation letters from executives overseeing teams that do not meet the company’s stringent standards for excellence, necessity, and trustworthiness.
Musk emphasized the importance of stringent cost reduction measures, stating that Tesla must be “absolutely hard core” in its approach to managing headcount and expenses. These actions come at a crucial juncture for Tesla, as the company faces challenges stemming from subdued sales and heightened competition from Chinese automakers like BYD.
During an earnings call on April 23, Tesla disclosed a significant 9% year-over-year decline in quarterly revenue, marking its most substantial revenue drop since 2012. Additionally, the company reported a 20.1% decrease in car deliveries for the first quarter of 2024 compared to the previous quarter.
This recent wave of layoffs builds upon a similar move announced by Musk on April 14, which reduced Tesla’s workforce by over 10%. Prior to these layoffs, Tesla boasted a staff of more than 140,000 employees.
As Tesla navigates these challenges, Musk’s assertive stance on cost-cutting underscores the company’s commitment to optimizing operations and weathering the storm amidst a fiercely competitive market landscape.