Tesla To Lay Off 10 Percent Of Workforce, Elon Musk Says

AUSTIN — Tesla will lay off more than 10 percent of its workforce, CEO Elon Musk told employees in a memorandum published in full Monday by CNBC.

Musk cited the electronic vehicle maker's rapid growth, which he said led to duplication of roles.

“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,” Musk said. “… 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.”

The layoffs could affect about 14,000 of the 140,473 workers employed by Tesla at the end of last year.

The company is based in Austin but has a factory in Fremont and last year announced its new global engineering headquarters would be in Palo Alto. As of 2022, Tesla had 47,000 employees in California, according to the company.

Workers in California and Texas had already been notified of layoffs as of Monday morning, Reuters reported, citing a source familiar with the situation.

Shares of Tesla fell 3 percent at the opening bell Monday after the news broke.

Tesla sales dropped sharply last quarter as competition increased worldwide, electric vehicle sales growth slowed, and price cuts failed to draw more buyers. The company said it delivered 386,810 vehicles from January through March, nearly 9 percent below the 423,000 it sold in the same quarter of last year.

The Associated Press contributed to this story.