Elon Musk speaking during the Tesla Annual Shareholder’s meeting in Austin, Texas on June 13th, 2024.
Source: Tesla Inc.
Tesla’s hefty downsizing in 2023 has reduced its global headcount to just over 121,000 people, including temps, internal records suggest, indicating that the automaker has slashed more than 14% of its workforce so far this year.
The latest figure is not from precise payroll data, but from the number of people who are on Tesla’s “everybody” email distribution list as of June 17, a tally viewed by CNBC.
Tesla CEO Elon Musk sent an email to “everybody” that day. He told employees that, “Over the next few weeks, Tesla will be doing a comprehensive review to provide stock options grants for exceptional performance.” He added that option grants will also be awarded to “anyone who does something outstanding for the company.” Tesla’s plan to reinstitute options grants, after previously pausing performance-based equity awards, was reported first by Reuters.
Tesla’s layoffs announcement landed in April, when Musk sent out a companywide email telling employees that the automaker would be cutting more than 10% of its staff. Layoffs at the point were already underway.
Bloomberg reported that Musk was aiming for a 20% staff cut. Musk indicated that the number could be even bigger. On the company’s first-quarter earnings call later in April, he said Tesla had reached an inefficiency level of 25% to 30% 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 reorganize the company for the next phase of growth.”
In a filing for the fourth quarter, Tesla said its employee headcount worldwide at the end of December was 140,473, a number that represents salaried and hourly staffers. The “everybody” email list includes temps. At around 121,000, that suggests Tesla has reduced overall headcount by at least 14% since the end of 2023.
Tesla didn’t immediately respond to a request for comment.
In at least one instance, Musk’s headcount reductions went too far. Tesla dismantled its Supercharging team, consisting of hundreds of employees, including its leader, Rebecca Tinucci. The company later hired some of those people back, according to posts on LinkedIn
The broader cuts coincide with a slippage in sales at Tesla as the company reckons with an aging lineup of electric vehicles and increased competition in China as well as brand deterioration that a recent survey attributed partly to Musk’s “antics” and “political rants.” For the first quarter, Tesla reported a 9% drop in annul revenue, the biggest decline since 2012.
Across the auto industry, EV sales growth slowed this year after two years of rapid expansion. The slide was particularly acute for Tesla, whose Model Y was the top-selling car worldwide in 2023.
A Tesla employee, who asked not to be named in order to discuss sensitive internal issues, told CNBC that some factory workers are fearful more layoffs could follow in July depending on second-quarter results.
Musk has promised investors the company will soon publish a new “Master Plan,” which would be his fourth, and that Tesla will reveal its design for a “dedicated robotaxi” on Aug. 8. A production and deliveries report for the second quarter is expected from Tesla during the first week of July.
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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