Elon Musk sent out a memo to all Tesla staff last night.
Over the years, we have grown rapidly with multiple factories scaling around the globe. 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.
As part of this effort, we have done a thorough review of the organization and made the difficult decision to reduce our headcount by more than 10% globally. There is nothing I hate more, but it must be done. This will enable us to be lean, innovative and hungry for the next growth phase cycle.
I would like to thank everyone who is departing Tesla for their hard work over the years. I’m deeply grateful for your many contributions to our mission and we wish you well in your future opportunities. It is very difficult to say goodbye.
For those remaining, I would like to thank you in advance for the difficult job that remains ahead. We are developing some of the most revolutionary technologies in auto, energy and artificial intelligence. As we prepare the company for the next phase of growth, your resolve will make a huge difference in getting us there.
This would be about $1-1.4 billion in reduced salary if the 14,000 global staff were making $70,000-100,000 per year. There will be costs for the layoffs in Q2 but the reduced costs would increase margin by about 4-6% starting in Q3 if revenue and revenue growth are not negatively impacted.
The last major Tesla layoff was in June, 2022. Tesla reduced its US salaried workforce by roughly 10% over the next three months. This was ahead of an anticipated recession. There was a hiring freeze as well but hiring restarted a few months later.
Tesla is clearly facing a challenging transition.
Brian Wang is a Futurist Thought Leader and a popular Science blogger with 1 million readers per month. His blog Nextbigfuture.com is ranked #1 Science News Blog. It covers many disruptive technology and trends including Space, Robotics, Artificial Intelligence, Medicine, Anti-aging Biotechnology, and Nanotechnology.
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