Tesla to cut 10% of workforce after disappointing first quarter
Bloomberg has reported that Tesla is to cut 10% of its workforce after a series of controversies at the EV giant, including underwhelming sales, disputes in Europe over unionisation and legal action over its autopilot feature. The news agency reported the cuts, expected to affect some some 14,000 employeees, after seeing in internal company e-mail by CEO Elon Musk.
Earlier this month, Tesla announced its figures for the first quarter of 2024. These showed that substantially fewer electric cars had been sold. According to analysts, this was due to increasing competition from China and parts supply problems. The disappointing sales figures will now have a major impact on the company’s employees.
Musk wrote in the e-mail: “As we prepare the company for our next phase of growth, it is extremely important to look at every aspect of the company with an eye toward cutting costs and increasing productivity.”
In the first quarter of 2024 Tesla sold 386,810 vehicles worldwide, well below the 449,080 it aimed to deliver over the period.
In a press release at the time, Tesla announced that there were several reasons for the disappointing sales figures. First, an update to the Model 3 production line in Fremont, California caused a delay in production. A fire at the factory in Grünhede, Germany, also caused delays. In addition, Tesla also pointed to increasing competition from China. Those companies also receive a lot of state aid, which allows them to reduce their prices. Finally, central banks’ tightening monetary policy was also cited as a reason. This would make it more difficult for many people to buy a new car.
Tesla also scrapped a plan to release a more affordable vehicle in favour of the fully automated ‘Robotaxi’ to be unveiled in August.
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