Tesla shrinks by a minimum of 14% in 2024

According to internal data, Tesla has reduced its size by at least 14% this year, slashing its global headcount to just over 121,000 individuals, including temporary workers. The downsizing comes after a series of layoffs announced earlier in the year by CEO Elon Musk, who targeted a 20% reduction in staff.

Musk’s email to all employees on June 17 indicated a comprehensive review for stock options grants based on exceptional performance, signaling a shift in the company’s approach to incentives and rewards. This move follows a period of restructuring aimed at increasing efficiency after a prolonged period of growth.

Despite the efforts to streamline operations, Tesla faced challenges in maintaining sales growth, with a 9% drop in annual revenue reported for the first quarter of the year. Competition in the electric vehicle market, particularly in China, posed additional hurdles for the automaker.

Internal sources suggest that the recent workforce reductions may not be the end, as fears of further layoffs loom over factory workers, pending the company’s performance in the second quarter. Musk’s commitment to publishing a new “Master Plan” and unveiling a design for a “dedicated robotaxi” aims to reassure investors amidst the ongoing changes within the company.

As Tesla prepares to release its production and delivery report for the second quarter in July, the stock performance remains under scrutiny, with shares trading at $181.71, down 27% for the year compared to an 18% increase in the Nasdaq index.

Overall, the downsizing efforts reflect Tesla’s strategic adaptation to market conditions and internal operations, seeking to align its workforce and capabilities for sustained growth and innovation.