This Monday, Tesla notified the California Employment Development Department that it will be laying off about 600 more workers from its engineering and manufacturing centers in Fremont and Palo Alto. This is part of the company’s huge restructuring.
The most recent round of layoffs affected a variety of departments and removed jobs at all levels, including directors and software developers as well as industrial workers and robotics engineers.
Through a public documents request, CNBC was able to get a file under the Worker Adjustment and Retraining Notification Act, or WARN Act, which contained information about the cuts.
Since at least January, the business has been reducing its workforce in response to growing competition as well as waning consumer interest in Tesla electric cars. In an April message, CEO Elon Musk informed staff members that by the end of 2023, the business would have laid off over 10% of its 140,473 global workforce.
According to earlier filings, Tesla planned to eliminate 6,300 jobs in Buffalo, New York, Austin, Texas, and California.
During Tesla’s quarterly earnings call on April 23, Musk stated that the firm had experienced a build-up of 25% to 30% “inefficiency” over the previous few years. This suggests that tens of thousands more employees may be affected by the current layoffs than the 10% figure would imply.
The 378 jobs that were eliminated in Fremont, California, the location of Tesla’s first American manufacturing facility, included personnel and assembly line managers, per the WARN application. At the company’s battery development center on Kato Road, there were sixty-five cuts.
Requests for comments from Tesla were not answered.
A director of user experience design and two directors of environmental health and safety were among the top positions removed in Fremont.
There were two directors of technical programs among the 233 more workers who lost their jobs in Palo Alto, the location of the company’s engineering headquarters.
Additionally, according to two former workers who are intimately familiar with the situation, Tesla has fired most of the staff members who were in charge of creating and refining apps for both customers and employees. According to the WARN application, numerous employees at Tesla’s Palo Alto headquarters on Hanover Street were let go.
The older Model S and X automobiles as well as the Model 3 sedan that Tesla produces in Fremont are in lower demand. The first quarter saw a decrease in total deliveries compared to the same period last year, and Tesla revealed the greatest revenue reduction from year to year since 2012.
Strong competition has continued to weigh on Tesla’s sales in the second quarter, particularly in China. Both Nio and Xiaomi have introduced new electric vehicle models that are less expensive than Tesla’s best-selling models.
Compared to the S&P 500’s 11% gain so far this year, Tesla’s stock price has dropped by around 30%.
Musk has been attempting to persuade investors to support Tesla’s potential to eventually produce self-driving software, a robotaxi, and a “sentient” humanoid robot rather than concentrating on car sales. Although Musk and Tesla have long promised its consumers that their current EVs would become robotaxis with self-driving software, the company’s systems currently need ongoing human supervision.
The group in charge of developing the U.S. network of Superchargers, or fast-charging stations for electric vehicles, was among the other recent layoffs at Tesla.
In its 2023 annual report, Tesla revealed its intentions to expand and enhance its infrastructure for charging, with the goal of “ensuring cost effectiveness and customer satisfaction.” Following the announcement by other automakers of their plans to adopt the North American Charging Standard, Tesla stated in the filing that it needed to grow its “network to ensure adequate availability to meet customer demands”.
It has been claimed that Tesla has begun to rehire a portion of its Supercharger staff after firing the majority of them. This is similar to the job layoffs that Musk conducted at Twitter after purchasing the company and rebranding it as X. Last year, Musk expressed his desire to rehire some of the people he let go to CNBC’s David Faber.