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Tesla Layoffs 10% Of Its Global Workforce Amid Declining Sales

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Elon Musk’s Tesla is facing significant challenges as the electric vehicle giant grapples with slowing sales and heightened competition for the first time in its history. Responding to the disappointing first-quarter results, Tesla began a round of layoffs that will affect 10% of its global workforce. In total, over 14,000 employees are about to be left without a job.

While disappointing, this move is not entirely unexpected. Tesla has been facing trouble for a while now, struggling to maintain the explosive growth it once enjoyed even after a series of price cuts. Further, competitors in China and elsewhere produce more competitive EVs, eroding Tesla’s market share.

As we prepare the company for our next phase of growth, it is essential to look at every aspect of the company for cost reductions and increased productivity,” Musk wrote in an internal email announcing the layoffs.

The company’s strategy is shifting as it targets improved profitability. In its last Q4 report, Tesla’s gross profit margin dipped to 17.6%, its lowest level in over four years. Though Tesla denies it, reports point to a potential abandonment of a much-touted affordable EV model, which could impact long-term growth if true.





The layoffs are part of a broader cost-cutting strategy. Tesla managers are directed to scrutinize employee performance and streamline operations. Last year, numerous tech companies also had to reduce staff, with economic jitters looming large.

The layoffs extend to Tesla’s executive ranks as well. Drew Baglino, Senior VP of Powertrain and Energy, and Rohan Patel, known for his outspoken social media presence, have been caught up in this round of layoffs. The reasons for their exit are unclear, but it further highlights the seriousness of Tesla’s current situation.

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