Recently, Tesla announced plans to cut approximately 600 more employees at its manufacturing facilities and engineering offices. These job cuts have affected a wide range of roles, from entry-level positions to directors, across various departments. The company cited weakening demand for Tesla EVs and increased competition as reasons for the restructuring. This move is part of a broader effort to streamline operations and remain competitive in the electric vehicle market.
According to a Worker Adjustment and Retraining Notification (WARN) Act filing obtained by CNBC, the latest round of layoffs included 378 job cuts in Fremont and 65 cuts at the company’s battery development center on Kato Rd. Tesla also eliminated 233 positions in Palo Alto, where the company’s engineering headquarters are located. The cuts impacted roles involved in vehicle assembly, staffing, user experience design, and technical programs. Despite the layoffs, Tesla did not provide any comments on the matter.
Tesla has been grappling with reduced demand for its vehicles, including the older Model S and X vehicles and the Model 3 sedan. The company reported a drop in total deliveries in the first quarter and a significant year-over-year revenue decline. Competition, especially in key markets like China, has intensified, with rival companies like Xiaomi and Nio launching new EV models at lower prices. This has put pressure on Tesla’s sales and profitability, leading to the need for cost-saving measures like layoffs.
In response to the challenges in the EV market, Tesla has been emphasizing its potential in self-driving software, robotaxis, and humanoid robots. CEO Elon Musk has been trying to shift investors’ focus from vehicle sales to the development of innovative technologies. However, Tesla’s self-driving systems still require human supervision, delaying the rollout of fully autonomous vehicles. Additionally, the company recently cut jobs related to building out its Supercharger network, only to start rehiring some members later.
Despite the recent layoffs and restructuring efforts, Tesla remains optimistic about its long-term prospects. The company’s stock price has faced volatility this year, but Musk is confident in Tesla’s ability to innovate and disrupt the automotive industry. Tesla’s commitment to expanding its charging infrastructure and delivering cutting-edge technology like self-driving software demonstrates its determination to stay ahead in the competitive EV market. Moving forward, Tesla will need to navigate challenges related to demand, competition, and technological advancements to secure its position as a leader in the electric vehicle industry.