Tesla's largest-ever layoff exceeds expectations? Media reports that more than 14% have been laid off this year, with a possible continuation in July

On Friday, June 21st, the media found that as of June 17th, Tesla had already laid off over 14% of its employees, based on the number of people on the "all staff" email list.

This data was calculated by the media following an incident on June 17th when Musk sent an email to "all staff" stating, "In the coming weeks, Tesla will conduct a comprehensive review and provide stock options to outstanding employees. Any employee who has made outstanding contributions to the company will also receive stock option rewards." Earlier reports indicated that Tesla had temporarily suspended its performance-based stock award plan in the past, but was planning to restart it.

According to Tesla's financial report, as of the end of December 2023, the total number of global employees, including temporary workers, was 140,473. After a wave of large-scale layoffs, the current "all staff" email list shows approximately 121,000 employees (including temporary workers). Therefore, the media calculated that since the end of 2023, Tesla's total number of employees has decreased by over 14%.

Tesla has not yet responded to this news.

Will Tesla continue to lay off employees in July?

In April of this year, Musk reportedly notified employees via "all staff" email that global layoffs exceeded 10%, about 14,000 employees, marking the highest layoff rate in history, emphasizing the importance of reducing costs and increasing efficiency. This marks the fifth large-scale layoff by Tesla since a 2% layoff in 2017. In April, there were reports that Musk's goal was to cut 20% of the workforce, with suggestions that this number could be even higher.

During this round of layoffs, two executives, including Drew Baglino, who led Tesla's battery technology, have resigned. Investors have expressed concerns about Tesla's succession plan, leading to a more than 5.5% overnight drop in Tesla's stock price on Monday.

In fact, Musk has overshot layoffs several times. For example, Tesla disbanded its Supercharger team, with hundreds of employees and team leader Rebecca Tinucci all being laid off at once. Posts on LinkedIn show that Tesla later rehired some of the laid-off employees from that team.

Signs of layoffs were evident earlier. During the first quarter earnings call in April, Musk mentioned:

"Since the 'long-term prosperity' that began in 2019, Tesla's efficiency has dropped by 25% to 30%. We have made some adjustments, but now is the time to reorganize the company and prepare for the next phase of growth."

This large-scale layoff comes as Tesla's sales decline. Tesla is facing unfavorable factors such as slowing growth in the new energy vehicle industry, aging electric vehicle lineup, intensified competition in China, and a recent survey showing damage to the Tesla brand image partly due to Musk's "eccentric behavior" and "political remarks" After two years of rapid expansion in the entire automotive industry, growth has slowed down this year. Many car companies are struggling to gain just a 1% market share, and the industry's declining growth has had a greater impact on Tesla. This is because its Model Y is expected to be the best-selling model globally in 2023. Facing immense pressure, even the industry leader Tesla has been forced to lower prices for promotions, but with little success. Tesla's first-quarter financial report data shows that the company's revenue dropped by 9% year-on-year, the largest decline since 2012.

An unnamed Tesla employee revealed to the media that some factory workers are worried that if the performance in the second quarter is poor, there may be more layoffs in July.

In the face of industry downturn and declining stock prices, Elon Musk is trying to turn the tide. He has promised investors that the company will soon release his fourth "master plan" and Tesla will unveil a design for a "dedicated autonomous taxi" on August 8. It is expected that Tesla will release its production and delivery report for the second quarter in the first week of July.

Tesla's stock price rose by 0.79% on Friday, closing at $181.71. As of the Friday close, the stock has fallen by about 26.3% this year, while the Nasdaq has risen by 18% during the same period.