Elon Musk is forced to cut Tesla staff due to falling demand and intensifying price competition in the electric car market.
Tesla layoffs
Massive layoffs
Tesla, founded by Elon Musk, has announced unprecedented layoffs across the organization . According to internal reports, the number of employees will decrease by more than 10% of the total number of employees worldwide, which at the end of 2023 was 140,473 people. Exact numbers of layoffs have not yet been released, but it is reported that some workers in California and Texas have already received relevant notices.
Reasons for cuts
The decision to make large-scale cuts is related to the drop in sales of Tesla electric cars and aggravation of price competition on the market. An internal memo from the company's management notes that before moving on to the "next phase of growth," a thorough analysis of all aspects of operations is needed to cut costs and improve productivity. Thus, the available resources are reassessed and the staff is optimized.
Market impact
The situation with Tesla reveals a general trend of slowing demand for electric vehicles. For example, energy giant BP has also cut more than 10% of staff at its electric car charging station business. Experts note that the bet on the rapid growth of commercial fleets of electric vehicles turned out to be unfounded. On the other hand, some analysts believe that the layoffs at Tesla may be related to cost-cutting ahead of the release of new models amid a temporary slowdown in sales after the rapid growth caused by the launch of the Model Y and Model 3.
Alternatives to electric vehicles
At the same time, other automakers are reviewing their strategies for entering the electric vehicle market due to slowing demand. In particular, Ford Motor Co. postponed the release of new electric models, instead focusing on hybrid cars. In the US, sales of electric vehicles in the first quarter of 2023 grew by only 2.7%, while sales of hybrids increased by 45%. A similar trend is observed in Ukraine, where the demand for hybrids grew by 59%, and Toyota became the leader in this segment.
Glossary
- Tesla is an American company specializing in the production of electric vehicles and energy storage systems.
- Elon Musk is the founder of Tesla, a famous entrepreneur and engineer.
- Model Y and Model 3 are popular models of Tesla electric cars.
- BP is one of the largest oil and gas companies in the world, which is also developing the direction of charging stations for electric cars.
- Toyota is a Japanese automobile company, a leading manufacturer of hybrid cars.
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Discussion of the topic – Tesla to lay off more than 10% of workers worldwide due to falling sales
Elon Musk's company Tesla is forced to cut more than 10% of its workforce due to declining sales and an intensifying price war in the electric car market.
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Ельвіра
In my opinion, layoffs can negatively affect the quality of Tesla's products 🤔 Although the company, of course, needs to cut costs, will it not harm their reputation and image?
Дітер
I think Tesla made a smart choice. Now all companies are forced to optimize costs due to the economic situation. It is better to go through personnel reduction than to lose more money due to a drop in sales 💰
Франсуа
I am more concerned that Tesla may slow down the development of new models of electric cars 🚗 It is important for them to keep up with the competition and maintain a leadership position in the market.
Томас
Everything depends on how these reductions are carried out. If unproductive employees are fired, but key specialists remain, the company will only win. But if they are fired randomly, then problems cannot be avoided 😒
Анджело
When I bought a Tesla Model 3, I expected years of manufacturer support. Now I'm a little worried that the service may deteriorate after the layoffs 🧐 I hope Musk knows what he's doing.
Геннадій
I have always been skeptical about electric cars 🚗⚡ It seems that manufacturers have overestimated the demand for them. Now we have to reduce staff and reduce costs. I feel that hybrids are more promising.
Марина
Electric cars are the future, but now is a really difficult period for their manufacturers. I hope that the reduction in Tesla is only a temporary measure, and later sales will increase again 🆙 Otherwise, you will have to switch to good old gasoline cars 😄
Владислав
Let's face the truth - Tesla has always been arrogant towards competitors in the electric car market. Maybe these dismissals will save them a little pride and force them to work more efficiently 💼
Ганна
In my opinion, this is good news for Tesla fans - maybe the company will focus on the quality of service and the development of new technologies instead of squandering funds 💡 I wish them to persevere in a difficult period!
Матеуш
I was just looking at the sales statistics of electric cars in Ukraine - it was surprising to me that hybrids have better growth rates. Maybe Tesla and other manufacturers should pay more attention to this segment? 🤔
Оксана
Layoffs are always hard to take, especially when it comes to such a well-known company. I hope that Tesla has considered everything and will protect the workers as much as possible. And buyers, as they say, vote with the hryvnia and choose the best option for themselves. 💰
Леон
It is interesting that the price war on electric cars is intensifying, but sales of hybrids are growing 📈 Maybe the manufacturers overestimated the willingness of consumers to pay a lot of money for electric cars?
Анастасія
Not sure that downsizing is the right way out for Tesla. Other companies, such as Ford, are switching to hybrids and more affordable models. Wouldn't that be better than cutting staff costs? 🤔
Петро
In my opinion, Elon Musk should listen more to consumers and market trends. Because right now, Tesla seems to be doing the same thing as traditional automakers - cutting staff to survive. And this does not correspond to their image of an innovative company at all 🚀
Маріола
I wouldn't jump to conclusions. Redundancy is always a painful process, but sometimes it is necessary to optimize the business. Let's wait and see how this affects Tesla in the future 💼