Tesla cutting 10 percent of workforce

Tesla plans to cut more than 10 percent of its global workforce, CEO Elon Musk said in a Monday memo to employees.

“Over the years, we have grown rapidly with multiple factories scaling around the globe,” Musk said in the memo, obtained by CNBC. “With this rapid growth there has been duplication of roles and job functions in certain areas.”

“As we prepare the company for our next phase of growth, it is extremely important to look at every aspect of the company for cost reductions and increasing productivity,” he added.

The cuts will likely impact about 14,000 employees, based on the electric vehicle company’s worldwide headcount of 140,473 at the end of December.

“There is nothing I hate more, but it must be done,” Musk said in Monday’s memo. “This will enable us to be lean, innovative and hungry for the next growth phase cycle.”

Tesla reported a decline in vehicle deliveries in the first quarter of 2024. The EV company delivered 386,810 vehicles between January and March, down 8.5 percent from the same time last year.

It said the decline in deliveries was partially due to factories shutting down amid shipping difficulties in the Red Sea and a factory in Germany losing power after an arson attack.

The EV company is also facing increased competition from the Chinese EV maker BYD, which surpassed Tesla in global sales in the fourth quarter of 2023. However, Tesla regained the title in the first quarter of this year.