Tesla laying off more than 10% of staff globally as sales fall

Read the full memo Elon Musk sent Tesla employees below:

Over the years, we have grown rapidly with multiple factories scaling around the globe. With this rapid growth there has been duplication of roles and job functions in certain areas. 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.

As part of this effort, we have done a thorough review of the organization and made the difficult decision to reduce our headcount by more than 10% globally. 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.

I would like to thank everyone who is departing Tesla for their hard work over the years. I'm deeply grateful for your many contributions to our mission and we wish you well in your future opportunities. It is very difficult to say goodbye.

For those remaining, I would like to thank you in advance for the difficult job that remains ahead. We are developing some of the most revolutionary technologies in auto, energy and artificial intelligence. As we prepare the company for the next phase of growth, your resolve will make a huge difference in getting us there.



Tesla (TSLA.O)

, opens new tab is laying off more than 10% of its global workforce, an internal memo seen by Reuters on Monday shows, as it grapples with falling sales and an intensifying price war for electric vehicles (EVs).
"About every five years, we need to reorganize and streamline the company for the next phase of growth," CEO Elon Musk commented in a post on X. Two senior leaders, battery development chief Drew Baglino and vice president for public policy Rohan Patel, also announced their departures, drawing posts of thanks from Musk although some investors were concerned.
Musk last announced a round of job cuts in 2022, after telling executives he had a "super bad feeling" about the economy. Still, Tesla's headcount has risen from around 100,000 in late 2021 to over 140,000 in late 2023, according to filings with U.S. regulators.
Baglino was a Tesla veteran and one of four members, along with Musk, of the leadership team listed on the company's investor relations website.
Scott Acheychek, CEO of Rex Shares - which manages ETFs with high exposure to Tesla stock - described the headcount reductions as strategic, but Michael Ashley Schulman, chief investment officer at Running Point Capital Advisors, deemed the departures of the senior executives as "the larger negative signal today" that Tesla's growth was in trouble.
Less than a year ago, Tesla's chief financial officer, Zach Kirkhorn, left the company, fueling concerns about succession planning.
Tesla shares closed 5.6% lower at $161.48 on Monday. Shares of EV makers Rivian Automotive (RIVN.O), opens new tab, Lucid Group (LCID.O), opens new tab and VinFast Auto also dropped between 2.4% and 9.4%.
"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 in the memo sent to all staff.
"As part of this effort, we have done a thorough review of the organization and made the difficult decision to reduce our headcount by more than 10% globally," it said.
Reuters saw an email sent to at least three U.S. employees notifying them their dismissal was effective immediately.
Tesla did not immediately respond to a request for comment.


The layoffs follow an exclusive Reuters report on April 5 that Tesla had canceled a long-promised inexpensive car, expected to cost $25,000, that investors have been counting on to drive mass-market growth. Musk had said the car, known as the Model 2, would start production in late 2025.
Shortly after the story was published, Musk posted "Reuters is lying" on his social media site X, without detailing any inaccuracies. He has not commented on the car since, leaving investors and analysts to speculate on its future.
A Tesla car is seen in Santa Monica
A Tesla car is seen in Santa Monica, California, United States, October 23, 2018. REUTERS/Lucy Nicholson/File Photo Purchase Licensing Rights, opens new tab
Tech publication Electrek, which first reported, opens new tab on the latest job cuts, said on Monday that the inexpensive car project had been defunded and that many people working on it had been laid off.
Reuters also reported on April 5 that Tesla would shift its focus to self-driving robotaxis built on the same small-car platform. Musk posted on X that evening: "Tesla Robotaxi unveil on 8/8," with no further details.
Tesla could be years away from releasing a fully autonomous vehicle with regulatory approval, according to experts in self-driving cars and regulation.
Tesla shares have fallen about 33% so far this year, underperforming legacy automakers such as Toyota Motor (7203.T), opens new tab, and General Motors (GM.N), opens new tab, whose shares have rallied 45% and about 20% respectively.
Energy major BP (BP.L), opens new tab has also cut more than a tenth of the workforce in its EV charging business after a bet on rapid growth in commercial EV fleets did not pay off, Reuters reported on Monday, underscoring the broader impact of slowing EV demand.


A newly elected works council of labour representatives at Tesla's German plant was not informed or consulted ahead of the announcement to staff, said Dirk Schulze, head of the IG Metall union in the region.
"It is the legal obligation of management not only to inform the works council but to consult with it on how jobs can be secured," Schulze said.
Analysts from Gartner and Hargreaves Lansdown said the cuts were a sign of cost pressures as the carmaker invests in new models and artificial intelligence.
Tesla reported this month that its global vehicle deliveries in the first quarter fell for the first time in nearly four years, as price cuts failed to stir demand.
The EV maker has been slow to refresh its aging models as high-interest rates have sapped consumer appetite for big-ticket items, while rivals in China, the world's largest auto market, are rolling out cheaper models.
China's BYD (002594.SZ), opens new tab briefly overtook the U.S. company as the world's largest EV maker in the fourth quarter, and new entrant Xiaomi (1810.HK), opens new tab has garnered substantial positive press.
Tesla is gearing up to start sales in India, the world's third-largest auto market, this year, producing cars in Germany for export to India and scouting locations for showrooms and service hubs in major cities.
Tesla recorded a gross profit margin of 17.6% in the fourth quarter, the lowest in more than four years.

 China’s economy expanded at a faster-than-expected pace in the first three months of the year, helped by policies aimed at stimulating growth and stronger demand, the government said Tuesday.

The world’s second-largest economy expanded at a 5.3% annual pace in January-March, beating analysts’ forecasts of about 4.8%, official data show. Compared to the previous quarter, the economy grew 1.6%.

China’s economy has struggled to bounce back from the COVID-19 pandemic, with a slowdown in demand and a property crisis weighing on its growth.

The better-than-expected data Tuesday came days after China reported its exports sank 7.5% in March compared to the year before, while imports also weakened. Inflation cooled, reflecting deflationary pressures resulting from slack demand amid a crisis in the property sector.

Industrial output for the first quarter was up 6.1% compared to the same time last year, and retail sales grew at an annual pace of 4.7%. Fixed investment, in factories and equipment, grew 4.5% compared to the same period a year earlier.

The strong growth in January-March was supported by “broad manufacturing outperformance,” festivities-boosted household spending due to the Lunar New Year holidays and policies that helped boost investments, according to China economist Louise Loo of Oxford Economics.

“However, ‘standalone’ March activity indicators suggest weakness coming through post-Lunar New Year,” she said. “External demand conditions also remain unpredictable, as seen in March’s sharp export underperformance.”

Loo noted that an unwinding of excess inventory, normalization of household spending after the holidays, and a cautious approach to government spending and other stimulus will affect growth in this quarter.

Policymakers have unveiled a raft of fiscal and monetary policy measures as Beijing seeks to boost the economy. China has set an ambitious gross domestic product (GDP) growth target of about 5% for 2024.

Such strong growth usually would push share prices across the region higher. But on Tuesday, Asian shares fell sharply after stocks retreated on Wall Street.

The Shanghai Composite index lost 1.4% and the Hang Seng in Hong Kong lost 1.9%. The benchmark for the smaller market in Shenzhen, in southern China, lost 2.8%.

Stronger growth in the region’s biggest economy normally would be seen as a positive for its neighbors, which increasingly rely on demand from China to power their own economies. However, strong growth figures are also viewed as a signal that the government will hold back on further stimulus.

 Companies in the United States and Canada have kicked off 2024 with thousands of job cuts across sectors, signaling that the spate of layoffs seen in 2023 could persist as they scramble to rein in costs.
While hopes of a soft landing have grown in recent months, companies continue to be cautious as the outlook on rate cuts by the Federal Reserve remains uncertain.
Here is a snapshot of job cuts announced so far in 2024:


* Amazon's (AMZN.O), opens new tab job cuts include less than 5% of employees at Buy with Prime unit, 5% at audiobook and podcast division Audible, several hundred in streaming and studio operations, 35% at streaming unit Twitch, a few hundred at healthcare units One Medical and Amazon Pharmacy. It also announced layoffs at Amazon Web Services(AWS) impacting several hundred roles in sales, marketing, and global services and a few hundred roles in the physical store's technology team.
* Layoffs at Alphabet (GOOGL.O), opens new tab including dozens at the division for developing new technology X Lab, hundreds in the advertising sales team, hundreds across teams, including the hardware team responsible for Pixel, Nest and Fitbit, and a majority in the augmented reality team.
* Microsoft (MSFT.O), opens new tab is cutting around 1,900 jobs at gaming divisions Activision Blizzard and Xbox.
* IBM (IBM.N), opens new tab plans to lay off some employees in 2024 but will hire more for AI-centered roles.
* E-commerce firm eBay (EBAY.O), opens new tab plans to cut about 1,000 roles or around 9% of its workforce.
* Videogame software provider Unity Software (U.N), opens new tab to cut about 25% of workforce, or 1,800 jobs.
* DocuSign (DOCU.O), opens new tab plans to reduce its workforce by about 6%, or 400 employees, with a majority in its sales and marketing organizations.
* Snap (SNAP.N), opens new tab plans to cut around 528 jobs or 10% of its global workforce.
* Salesforce (CRM.N), opens new tab is laying off about 700 employees, or roughly 1% of its global workforce.
* Network giant Cisco (CSCO.O), opens new tab is planning to restructure its business which will include laying off thousands of employees.
* Autonomous vehicle technology company Aurora Innovation (AUR.O), opens new tab lays off 3% of workforce.
* Canada's BlackBerry (BB.TO), opens new tab plans more layoffs, in addition to about 200 job cuts in the prior quarter.
* Satellite radio company SiriusXM (SIRI.O), opens new tab plans to reduce workforce by about 3%, or about 160 roles.
* Bumble (BMBL.O), opens new tab is set to eliminate 350 jobs or about 30% of its workforce.


* Walt Disney's (DIS.N), opens new tab Pixar Animation Studios is set to cut jobs as the studio has completed production on some shows.
* Comcast-owned (CMCSA.O), opens new tab British media group Sky plans to cut about 1,000 jobs across its businesses this year.
* The Los Angeles Times plans to lay off 94 journalists.
* Paramount Global (PARA.O), opens new tab is planning to conduct an unspecified number of layoffs.
* Business Insider plans to lay off around 8% of its staff.
* Bell Canada (BCE.TO), opens new tab plans to slash 4,800 jobs.


* PayPal Holdings (PYPL.O), opens new tab is planning to cut about 2,500 jobs, or 9% of its global workforce this year.
* Payments firm Block Inc (SQ.N), opens new tab has started to cut unspecified jobs.
* Citigroup (C.N), opens new tab is planning to reduce its headcount by 20,000 people over the next two years. It has announced plans to slash 716 roles in New York towards that target.
* Investment banking giant Morgan Stanley (MS.N), opens new tab is planning to cut hundreds of jobs in its wealth management unit, a person familiar with the matter told Reuters, adding that the cuts will impact less than 1% of the division's employees.
* Exchange operator Nasdaq (NDAQ.O), opens new tab plans to slash hundreds of jobs as it integrates fintech firm Adenza into its business.
* Asset manager BlackRock (BLK.N), opens new tab is set to cut about 3% of its workforce but expects a larger headcount by the end of 2024.


* Cosmetics giant Estee Lauder (EL.N), opens new tab plans to cut 3% to 5% of its global workforce.
* Wayfair (W.N), opens new tab plans to lay off 1,650 employees, or about 13% of its workforce.
* U.S. department store chain Macy's (M.N), opens new tab is cutting 2,350 jobs, closing five stores.
* Levi Strauss & Co (LEVI.N), opens new tab is planning to slash 10%-15% of global corporate jobs.
* Hershey's (HSY.N), opens new tab restructuring plan will impact less than 5% of its workforce.
* Nike (NKE.N), opens new tab will cut about 2% of its total workforce, or more than 1,600 jobs, as the sportswear giant looks to cut costs after flagging weaker profits this year.


* Novavax (NVAX.O), opens new tab is cutting about 12% of workforce.


* Defense contractor Lockheed Martin (LMT.N), opens new tab is planning to cut 1% of its jobs.
* United Parcel Service (UPS.N), opens new tab plans to cut 12,000 jobs to cut costs.


* U.S. miner Piedmont Lithium (PLL.O), opens new tab cuts 27% of workforce in the cost-cutting plan.
* Canadian oil and gas pipeline firm TC Energy (TRP.TO), opens new tab has laid off some of its workers as part of a previously announced plan to integrate its natural gas pipeline units.
* Canada-based crude pipeline operator Enbridge (ENB.TO), opens new tab said it would reduce its workforce by 650 jobs, or 5%, in a bid to cut costs.


Electric automaker Tesla (TSLA.O), opens new tab will lay off more than 10% of its global workforce, an internal memo seen by Reuters on Monday shows, as it grapples with falling sales amid an intensifying price war for electric vehicles.
A look at the day ahead in European and global markets from Ankur Banerjee
Rising tensions in the Middle East and the return of a higher-for-longer narrative on U.S. rates have sapped risk appetite, sending Asian stocks tumbling, the dollar climbing to five-month highs and leaving the fragile yen stuck at levels last seen in the mid 1990s.
The dour mood is set to continue in Europe as bourses there are due to open sharply lower, futures indicate. UK labour and wage data will likely hog the spotlight as traders parse through the reports to gauge when the Bank of England will start its rate cutting cycle.
Markets are pricing in August as the most likely start date for policy easing, with 49 basis points of cuts expected for the year.
The Federal Reserve on the other hand is likely to be in no rush to start its easing cycle after March retail sales came in higher than expected, the latest evidence of a resilient U.S. economy.
Markets are now pricing in less than two rate cuts this year compared with six (yes, you read that right) rate cuts anticipated at the start of 2024. The starting point for the easing cycle is now September, pushed back from June, which was pushed back from March.
Comments from Fed officials have also led traders to dial back their expectations with San Francisco Federal Reserve Bank President Mary Daly the latest to suggest the Fed is in no hurry to cut rates.
"The worst thing to do is act urgently when urgency is not required," Daly said.
The safe-haven flight to gold and dollars continued as the world awaits word on how Prime Minister Benjamin Netanyahu would respond to Iran's first-ever direct attack. The yen, often sought as a safe asset, weakened further to 34-year lows as the widening difference between U.S. and Japan rates weigh.
Meanwhile, China GDP handily beat estimates but weakness in March data kept investors worried about the country's economic recovery.
China will also be at the forefront of the corporate world's mind as LVMH (LVMH.PA), opens new tab, the world's biggest luxury group, reports earnings, with investors bracing for a steep slowdown in luxury sales amid lacklustre Chinese demand.
Reuters Graphics
Reuters Graphics
Key developments that could influence markets on Tuesday:
Economic events: UK employment change for Feb, UK average weekly earnings for 3 months through Feb
Earnings: LVMH, UnitedHealth, Johnson & Johnson, Bank of America and Morgan Stanley.

Stung by paying billions of dollars for settlements and trials, chemical giant Bayer has been lobbying lawmakers in three states to pass bills providing it a legal shield from lawsuits that claim its popular weedkiller Roundup causes cancer.

Nearly identical bills introduced in Iowa, Missouri, and Idaho this year — with wording supplied by Bayer — would protect pesticide companies from claims they failed to warn that their product causes cancer if their labels otherwise complied with the U.S. Environmental Protection Agency’s regulations.

But legal experts warn the legislation could have broader consequences — extending to any product liability claim or, in Iowa’s case, providing immunity from lawsuits of any kind. Critics say it could spread nationwide.

“It’s just not good government to give a company immunity for things that they’re not telling their consumers,” said Matt Clement, a Jefferson City, Missouri, attorney who represents people suing Bayer. “If they’re successful in getting this passed in Missouri, I think they’ll be trying to do this all over the country.”

Bayer described the legislation as one strategy to address the “headwinds” it faces. About 167,000 legal claims against Bayer assert Roundup causes a cancer called non-Hodgkin’s lymphoma, which Bayer disputes. The company has won some cases, and settled many others but also has suffered several losses in which juries awarded huge initial judgments. It has paid about $10 billion while thousands of claims linger in court.

Though some studies associate Roundup’s key ingredient with cancer, the EPA has regularly concluded it is not likely to be carcinogenic to humans.

The costs of “defending a safe, approved product” are unsustainable, said Jess Christiansen, head of communications for Bayer’s crop science division.

The legislation was introduced in targeted states pivotal to Bayer’s Roundup operations and is at a different stage in each. It passed the Iowa Senate, is awaiting debate in the Missouri House, and was defeated in Idaho, where this year’s legislative session ended.

Farmers overwhelmingly rely on Roundup, which was introduced 50 years ago as a more efficient way to control weeds and reduce tilling and soil erosion. For crops like corn, soybeans, and cotton, it’s designed to work with genetically modified seeds that resist Roundup’s deadly effect.

Missouri state Rep. Dane Diehl, a farmer who worked with Bayer to sponsor the legislation, cited concerns that costly lawsuits could force Bayer to pull Roundup from the U.S. market, leaving farmers to depend on alternative chemicals from China.

“This product, ultimately, is a tool that we need,” said Diehl, a Republican.

Iowa Gov. Kim Reynolds, a Republican, said in an email the legislation maintains the integrity of the regulatory process and, without it, “Iowa risks losing hundreds of jobs” in Muscatine, an eastern Iowa city where Roundup is mostly produced.

The Associated Press is seeking public records on Bayer’s communications with Reynolds’ office.

Bayer, like other companies, hires lobbyists in states to advocate for its interests. The company backs this legislation in the states where “we have a big, direct economic impact,” Christiansen said.

Roundup’s key ingredient, glyphosate, is derived from phosphate mined in Idaho. St. Louis is the headquarters of its North American crop science division, acquired in its 2018 purchase of Monsanto. Because of that, many of the lawsuits are filed in Missouri.

The five lobbyists registered for Bayer in Iowa and three in Idaho is largely consistent with recent years, but the number working in Missouri this year ballooned from four to nine. Lobbyist expenditures exceeded $8,000 in Idaho this year; similar information was not available in Iowa or Missouri.

Led by Bayer, a coalition of agricultural organizations called Modern Ag Alliance also is spending tens of thousands of dollars on radio and print advertisements claiming that trial lawyers and litigation threaten the availability of glyphosate.

On its website, the group asserts that at risk are 500 jobs connected to glyphosate production in Iowa, and 800 jobs in Idaho.

Bayer stopped short of threatening closures. The Iowa facilities, including in Muscatine, “are very critical facilities to our business, so we’ll remain at some sort of support level,” Christiansen said.

At issue in the lawsuits and legislation is how Bayer – and any other pesticide company — communicates with consumers about the safety of its products.

Companies are required to register products with the EPA, which evaluates — and then reevaluates every 15 years — a pesticide and its label. The EPA reiterated in 2020 that glyphosate used as directed posed no health risks to humans. But a federal appeals court panel in 2022 ruled that the decision “was not supported by substantial evidence” and ordered the EPA to review further.

The debate over glyphosate escalated when a 2015 report by the International Agency for Research on Cancer, part of the World Health Organization, said it’s “probably carcinogenic to humans” based on “limited” evidence of cancer in people and “sufficient” evidence in study animals.

Based on that international report, California sought to add a cancer warning label to products containing glyphosate. But a federal appeals court ruled against California last November, concluding such a warning wasn’t factual.

Christiansen emphasized that many regulatory agencies worldwide agree with the EPA and insisted Bayer has to stick to EPA labeling to ensure it isn’t providing false or misleading information. She added that the company is transparent in the information it does provide.

Critics of the legislation aren’t convinced, citing examples such as opioids and asbestos that had been deemed safe for use as directed — until they weren’t.

There also are concerns that the legislation could stifle any product liability claim since most rely on the argument that a company failed to warn, said Andrew Mertens, executive director of the Iowa Association for Justice, an organization for trial lawyers.

Jonathan Cardi, a product liability and torts expert at Wake Forest University School of Law, also said a strict reading of the Iowa legislation extends beyond liability claims, and “the way it’s drafted makes it interpretable to mean nobody could bring any suit.”

In lobbying lawmakers and in speaking with the AP, Bayer representatives disputed that the legislation would cut off other legal actions. Several legal experts said the legislation is unlikely to affect the 18,000 lawsuits already pending in Missouri’s capital of Jefferson City, and wouldn’t prevent similar claims in states that don’t adopt similar legislation.

In Idaho, the Republican-led Senate narrowly defeated the bill amid concerns about relying on federal agencies’ safety standards and limiting the ability of harmed individuals to sue.

John Gilbert, who farms in Iowa Falls, Iowa, with limited use of Roundup, called Republicans hypocritical for attempting to protect corporate interests after campaigning on standing up for Iowans.

The bill “invites a lot of reckless disregard,” said Gilbert, who is on the board for the Iowa Farmers Union. “No amount of perfume’s gonna make it anything but a skunk.”

Boeing is currently facing safety and quality concerns regarding its planes, particularly the 777 and 787 Dreamliner jets. These concerns are being brought to light ahead of a whistleblower hearing in the Senate, with Boeing engineer Sam Salehpour set to be the key witness.

## Recent Developments

To address these issues, Boeing held a briefing for journalists to proactively respond to the upcoming hearing. This move comes in the wake of reports that the Federal Aviation Administration (FAA) is investigating allegations made by Salehpour, claiming that Boeing took shortcuts in the manufacturing process of the 777 and 787 Dreamliner jets, which could increase the risk of catastrophic failure as the planes age.

## Previous Incidents

The company's reputation for safety and engineering quality has been tarnished in recent years, initially due to the two fatal crashes of the 737 Max in 2018 and 2019, which resulted in the grounding of that jet for 20 months. A more recent incident occurred when a door plug blew out on a 737 Max flight by Alaska Airlines, sparking further investigations and allegations regarding the safety of Boeing planes.

## Response and Actions

Boeing executives refrained from directly commenting on Salehpour's allegations during the briefing but emphasized that the number of employee tips about quality and safety issues has significantly increased since the Alaska Air incident. The company encourages these reports and claims that the volume of submissions in January and February of the current year has already matched that of the entire previous year.

## Stress Tests and Inspections

Boeing's vice president of engineering for Airplane Programs and chief engineer for mechanical and structural engineering highlighted that the 787 Dreamliner jets undergo stress tests designed to simulate far more flights than they will ever actually operate. These tests aim to ensure the planes can withstand significant stress over their operational lifespans. Real-world inspections of planes currently in service have revealed no evidence of fatigue, even after up to 16 years of use.

## Allegations and Standards

Salehpour's complaint centers on the alleged failure to properly fill tiny gaps when joining separately manufactured parts of the fuselage, which could result in premature wear and the risk of catastrophic failure. Boeing acknowledges that some planes did have wider gaps than their specified standards, leading to interruptions in 787 Dreamliner deliveries. However, subsequent inspections revealed no operational problems, and Boeing adjusted some of its gap standards in response.

While Boeing strives to address these safety and quality concerns, it remains evident that the company is actively responding to the issues raised by Salehpour and the wider scrutiny it is facing. The upcoming whistleblower hearing will likely shed further light on Boeing's efforts to ensure the safety and longevity of its commercial jets.  

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