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Tesla employees concerned over potential large-scale layoffs- reports

Published 04/14/2024, 11:35 PM
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Investing.com-- Tesla Inc (NASDAQ:TSLA) employees are concerned that the electric vehicle maker is planning to lay off a large portion of its workforce as it grapples with worsening sales, separate reports from Business Insider and Electrek showed. 

Both reports showed that rumors were circulating around Tesla’s offices- specifically the Texas Gigafactory- that the EV maker could announce the layoffs by as soon as this week. Workers were also concerned about layoffs at the Fremont factory.

The Electrek report said that the layoffs could be as high as 20%, while Business Insider reported that Tesla had already shortened production shifts for the Cybertruck.

The reports come as the world’s most valuable automaker clocked a sharp drop in first quarter deliveries, amid weakening demand and increased competition in China, one of its biggest markets.

Global EV demand was seen easing as customers scaled back big purchases in the face of worsening economic conditions. A resurgence in the popularity of hybrid models over the past year was also seen eating into EV demand. 

Tesla was seen instructing managers earlier this year to identify the most vital roles in the company. The EV maker had also reportedly delayed some performance reviews.

Tesla had slashed the prices of its vehicles over the past year, specifically in China, to help spruce up demand. But this provided only a limited boost to sales. 

The EV maker set weaker production targets for 2024 in the face of softer demand, and had reportedly also canceled plans for a low-cost EV. 

But Tesla has also touted plans for a greater push into self-driving and artificial intelligence technology to offset this decline. CEO Elon Musk recently said that the EV maker’s first robotaxi will be unveiled in August this year.

Musk has also largely blamed the sales downturn on high interest rates and a weaker global economy. 

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