Tesla is cutting “more than 10%” of its global workforce following an abysmal first fiscal quarter that saw the electric vehicle maker fall short of Wall Street’s expectations, according to a memo to staff.
Austin, Texas-based Tesla has been rumored to be planning layoffs for months as it slashed production at its factory in China and paused some stock rewards. Elektrek and Business Insider reported over the weekend that employees had heard about planned layoffs affecting as much as 20% of Tesla’s staffing. Workers on the online forum Blind had also discussed possible layoffs.
Tesla CEO Elon Musk has now told workers that more than 10% of workers will lose their jobs, or at least 14,000 of Tesla’s 140,000 total employees, according to the leaked memo. Musk cited a “duplication of roles and job functions in certain areas” that sprung up as the EV maker expanded.
“As part of this effort, we have done a thorough review of the organization and made the difficult decision to reduce our headcount by more than 10% globally,” Musk said. “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.”
Tesla stock sank almost 2% in pre-market trading Monday after news of the layoffs was first reported. Shares have fallen more than 31% this year, making Tesla one of the worst performers in the S&P 500, just behind Boeing.
The company reports its full first-quarter earnings results on April 23.
This is a developing story and will be updated.