Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
Tesla is cutting more than 10 per cent of its workforce — at least 14,000 jobs — as the worldwide EV slowdown and brutal price war hits the American automaker.
“We have . . . made the difficult decision to reduce our headcount by more than 10 per cent globally . . . this will enable us to be lean, innovative and hungry for the next growth phase cycle,” wrote Tesla’s chief executive Elon Musk in an internal memo to employees seen by the Financial Times.
The job cuts come as the slowdown in sales of EVs makes waves across the global car industry, with companies across the supply chain from South Korea to Germany slashing jobs and cutting costs.
Unlike legacy carmakers, Tesla is particularly exposed to the slowdown given its exclusive focus on electric vehicles. Shares in the company have fallen more than 30 per cent this year, making it the second-worst performer in the S&P 500 and underperforming those of legacy carmakers including Toyota, whose shares have rallied more than 44 per cent.
The pressure is especially high in China, the world’s largest auto market, where local EV makers are battling Tesla and other foreign carmakers for market share. Tesla’s share in China’s EV and hybrid market segment fell from 7.7 per cent to 6.6 per cent in the first two months of the year, according to the China Passenger Car Association
One source familiar with the situation said it was still unclear how the job cuts would fall globally, with stricter rules on hiring and firing employees in countries such as Germany, where Tesla has a gigafactory near Berlin.
The world’s largest EV maker has some 140,473 employees, up from 48,000 in 2019, according to an SEC filing. The Financial Times last week reported that Tesla was scouting locations in India for a new EV plant in which it would invest $2bn-$3bn.
“We are developing some of the most revolutionary technologies in auto, energy and artificial intelligence,” said Musk in his memo.
Electrek, the tech publication, first reported news of the job cuts. Tesla has been contacted for comment.
Additional reporting by Sylvia Pfeifer in London
Read the full article here
