Tesla is reportedly preparing for a round of layoffs, instructing its managers to identify critical members of their teams, according to a new report from Bloomberg. Managers were asked to make a binary assessment of their deputies’ roles, potentially indicating that a round of layoffs is imminent. This isn’t the first time Tesla has resorted to layoffs, often justifying them through hiring inefficiencies. Although the company has experienced aggressive headcount growth in the past, this has slowed down over the years. In 2022, Tesla grew its headcount by 29,000, but the growth decreased to 12,000 in 2023.
Last year, Tesla informed salaried employees that they would not be receiving their normal stock compensation following their annual reviews, leading to a decrease in morale. Moreover, workers were dissatisfied with their annual pay bump, prompting Tesla to conduct a review of compensation, albeit delayed. The company has been continuously implementing cost-cutting measures to support its price cuts in order to maintain demand for its electric vehicles.
Electrek’s Take
Concerns about morale at Tesla have been on the rise, especially as the company becomes more stringent with compensation and experiences stock decreases and controversies surrounding its CEO, Elon Musk. A round of layoffs would only exacerbate the feeling of job security among employees. Ultimately, Tesla’s ability to attract and retain talent is crucial to its success, so the current situation is cause for concern. We hope for the best for Tesla employees.
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