Tesla in big trouble: Nothing is going well for Elon Musk’s company

Tesla is in trouble! Amid the current uncertain global economic climate, exacerbated by geopolitical tensions, the company has had to take drastic steps. It has indeed announced a reduction of more than 10% in its global workforce. A decision that worries investors about its repercussions on Tesla’s future performance and stock market listing.

Tesla CEO Elon Musk detailed the job cuts in a memo sent to employees. https://t.co/tycF5vMtbT

— WGRZ (@WGRZ) April 15, 2024

Stock Market Plunge: Let’s Review the Context

Tesla’s rapid expansion in recent years has led to:

• a duplication of roles,
• overlapping job functions in certain areas.

In preparation for its next phase of expansion, the company thus acknowledges the need to cut costs and increase productivity.

In an internal note, Musk emphasized the importance of streamlining operations to stay agile, innovative, and ready for future growth. The workforce reduction at Tesla is not an isolated event. It is part of a periodic organizational restructuring necessary every 5 years to align with future growth phases.

The Job Cuts at Tesla: Some Figures

Tesla employed about 140,473 people according to its annual report. The job cuts mainly affect the United States and China. The sectors affected are sales, technology, and engineering.

Several service centers in the United States have experienced massive layoffs, mainly affecting sales staff and technicians. In China, more than 10% of the sales team has been informed of their layoffs.

The American headquarters of Tesla and the Chinese subsidiary of the group did not immediately respond to requests for comments. Local authorities in Shanghai and Beijing also did not immediately respond to requests for comment.

Contrary to information from the German press, Tesla Germany has refuted claims that 3,000 of its approximately 12,000 employees had been laid off. In reality, the company is currently evaluating how to implement Elon Musk’s instructions at the factory.

One thing is certain, Elon Musk’s decision raises concerns about the impact on employee morale, Tesla’s capacity for innovation, and its stock market listing.