Tesla has downsized by no less than 14% this 12 months, internal number shows

Tesla’s hefty downsizing since 2023 has reduced its global head count to only over 121,000 people, including temporary employees, internal records suggest, indicating that the automaker has slashed greater than 14% of its workforce to date this 12 months.

The newest figure shouldn’t be from precise payroll data, but from the variety of people who find themselves on Tesla’s “everybody” email distribution list as of June 17, a tally viewed by CNBC.

Tesla CEO Elon Musk sent an email to “everybody” that day. He told employees, “Over the following few weeks, Tesla can be doing a comprehensive review to offer stock options grants for exceptional performance.” He added that options grants may also be awarded to “anyone who does something outstanding for the corporate.” Tesla’s plan to reinstitute options grants, after previously pausing performance-based equity awards, was reported first by Reuters.

Tesla’s layoffs announcement landed in April, when Musk sent out a companywide email telling employees that the automaker can be cutting greater than 10% of its staff. Layoffs at that time were already underway.

Bloomberg reported that Musk was aiming for a 20% staff cut. Musk indicated that the number could possibly be even greater. On the corporate’s first-quarter earnings call later in April, he said Tesla had reached an inefficiency level of 25% to 30% after “a protracted period of prosperity” that began in 2019.

“We have made some corrections along the way in which,” Musk said on the decision. “However it is time to reorganize the corporate for the following phase of growth.”

In a filing for the fourth quarter, Tesla said its worker head count worldwide at the tip of December was 140,473, a number that represents salaried and hourly staffers. The “everybody” email list includes temporary employees. At around 121,000, that means Tesla has reduced overall headcount by no less than 14% because the end of 2023.

Tesla didn’t immediately reply to a request for comment.

In no less than one instance, Musk’s head-count reductions went too far. Tesla dismantled its Supercharging team, which consisted of lots of of employees, including its leader, Rebecca Tinucci. The corporate later hired a few of those people back, based on posts on LinkedIn.

The broader cuts coincide with a slippage in sales at Tesla as the corporate reckons with an aging lineup of electrical vehicles and increased competition in China in addition to brand deterioration that a recent survey attributed partly to Musk’s “antics” and “political rants.” For the primary quarter, Tesla reported a 9% drop in annual revenue, the largest decline since 2012.

Across the auto industry, EV sales growth slowed this 12 months after two years of rapid expansion. The slide was particularly acute for Tesla, whose Model Y was the top-selling automobile worldwide in 2023.

A Tesla worker, who asked to not be named as a way to discuss sensitive internal issues, told CNBC that some factory employees are fearful more layoffs could follow in July, depending on second-quarter results.

A production and deliveries report for the second quarter is anticipated from Tesla in the course of the first week of July.

Musk has promised investors the corporate will soon publish a latest “Master Plan,” which can be his fourth, and that Tesla will reveal its design for a “dedicated robotaxi” on Aug. 8.

Tesla shares were little modified on Friday at $181.71. The stock is down 27% this 12 months, while the Nasdaq is up 18%.

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