X CTO Elon Musk speaks on stage during the “Exploring the New Frontiers of Innovation: Mark Read in Conversation with Elon Musk” session at Lumière Theater during the Cannes Lions International Festival of Creativity 2024 – Day 3 on June 19, 2024 in Cannes, France.
Richard Burd | wireframe image | Getty Images
Tesla Internal records show that the significant downsizing since 2023 has reduced its global headcount to just over 121,000 people, including temporary workers, suggesting the automaker has cut more than 14% of its workforce so far this year.
The latest figure is not from exact salary data, but from the number of people on Tesla's “Everyone” email distribution list as of June 17, a tally seen by CNBC.
Tesla CEO Elon Musk sent an email to “everyone” that day. “Over the next few weeks, Tesla will conduct a comprehensive review of its provision of stock option grants for exceptional performance,” he told employees. Options grants will also be awarded to “anyone who does something great for the company,” he added. Tesla's plan to re-grant options, after pausing performance-based stock awards, was first reported by Reuters.
Tesla's layoff announcement came in April, when Musk sent a company-wide email telling employees that the automaker would cut more than 10% of its staff. Layoffs at that point were already underway.
Bloomberg reported that Musk was aiming to reduce the number of employees by 20%. Musk indicated that the number may be higher. On the company's first-quarter earnings call later in April, he said Tesla had reached a level of 25% to 30% inefficiency after a “long period of prosperity” that began in 2019.
“We've made some corrections along the way,” Musk said on the call. “But it is time to realign the company for the next phase of growth.”
In a statement for the fourth quarter, Tesla said that the number of its employees worldwide at the end of December was 140,473, a number that represents salaried and hourly employees. The “Everyone” email list includes temporary workers. At around 121,000, that suggests Tesla has reduced its overall headcount by at least 14% since the end of 2023.
Tesla did not immediately respond to a request for comment.
In at least one case, Musk's staff cuts went beyond the ceiling. Tesla has dismantled its supercharging team, which consisted of hundreds of employees, including its leader, Rebecca Tinucci. The company later hired some of those people, according to posts on LinkedIn.
The broader cuts coincide with declining sales at Tesla, as the company expects an aging lineup of electric vehicles and increased competition in China as well as a decline in the brand that a recent survey attributed in part to Musk's “antics” and “loud political statements.” In the first quarter, Tesla reported a 9% decline in annual revenue, the largest decline since 2012.
Across the auto industry, electric vehicle sales growth has slowed this year after two years of rapid expansion. The slide was particularly sharp for Tesla, whose Model Y was the best-selling car worldwide in 2023.
A Tesla employee, who requested anonymity to discuss sensitive internal issues, told CNBC that some factory workers fear the possibility of more layoffs in July, depending on second-quarter results.
Tesla's second-quarter production and delivery report is expected during the first week of July.
Musk has promised investors that the company will soon publish a new “master plan,” which will be his fourth, and that Tesla will unveil its design for a “custom robotaxi” on August 8.
Tesla shares were little changed on Friday at $181.71. The stock is down 27% this year, while the Nasdaq is up 18%.
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