- Tesla said in a filing this week that it’s cutting about 600 more jobs at its manufacturing facilities and engineering offices in Fremont and Palo Alto, California.
- CEO Elon Musk told employees in a memo in April that the company would cut more than 10% of its global workforce but hasn’t given a precise number.
- The restructuring at Tesla follows a drop in first-quarter sales, and a 30% stock price decline this year.
As part of Tesla’s massive restructuring, the electric vehicle maker notified the California Employment Development Department this week that it’s cutting approximately 600 more employees at its manufacturing facilities and engineering offices between Fremont and Palo Alto.
The latest layoffs eliminated roles across the board — from entry level positions to directors — and hit a broad array of departments, impacting factory workers, software developers and robotics engineers.
The cuts were reported in a Worker Adjustment and Retraining Notification (WARN) Act filing that CNBC obtained through a public records request.
Faced with weakening demand for Tesla EVs and increased competition, the company has been slashing headcount since at least January. CEO Elon Musk told employees in a memo in April that the company would cut more than 10% of its global workforce which had reached 140,473 employees at the end of 2023.
Previous filings revealed that Tesla would cut more than 6,300 jobs across California, Austin, Texas and Buffalo, New York.
Musk said on Tesla’s quarterly earnings call last month that the company had built up a 25% to 30% “inefficiency” over the past several years, implying the layoffs underway could impact tens of thousands more employees than the 10% number would suggest.
According to the WARN filing, the 378 job cuts in Fremont, home to Tesla’s first U.S. manufacturing plant, included people involved in staffing and running vehicle assembly. There were 65 cuts at the company’s Kato Rd. battery development center.
Tesla didn’t respond to a request for comment.
Among the highest-level roles eliminated in Fremont were an environmental health and safety director and a user experience design director.
In Palo Alto, home to the company’s engineering headquarters, 233 more employees lost their jobs including two directors of technical programs.
Tesla has also terminated a majority of employees involved in designing and improving apps made for customers and employees, according to two former employees directly familiar with the matter. The WARN filing shows that to be the case, with many cut from the team at Tesla’s Hanover Street location in Palo Alto.
Tesla faces reduced demand for cars it makes in Fremont, including its older Model S and X vehicles and Model 3 sedan. Total deliveries dropped in the first quarter from a year earlier, and Tesla reported its steepest year-over-year revenue decline since 2012.
An onslaught of competition, especially in China, has continued to pressure Tesla’s sales in the second quarter. Xiaomi and Nio have each launched new EV models, which undercut the price of Tesla’s most popular vehicles.
Tesla’s stock price has tumbled about 30% so far this year, while the S&P 500 is up 11%.
Musk has been trying to convince investors not to focus on vehicle sales and instead to back Tesla’s potential to finally deliver self-driving software, a robotaxi, and a “sentient” humanoid robot. Musk and Tesla have long promised customers self-driving software that would turn their existing EVs into robotaxis, but the company’s systems still require constant human supervision.
Other recent job cuts at Tesla included the team responsible for building out the Supercharger, or electric vehicle fast-charging network, in the U.S.
Tesla disclosed plans in its annual filing for 2023 to grow and optimize its charging infrastructure “to ensure cost effectiveness and customer satisfaction.” Tesla said in the filing that it needed to expand its “network in order to ensure adequate availability to meet customer demands,” after other auto companies announced plans to adopt the North American Charging Standard.
Since cutting most of its Supercharging team, Tesla has reportedly started to rehire at least some members, a move reminiscent of the job cuts Musk made at Twitter after he bought the company later rebranded as X. Musk told CNBC’s David Faber last year he wanted to rehire some of those he let go.
Read the latest WARN filing in California here:
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