Tesla, the electric vehicle company led by Elon Musk, announced plans to lay off 6,020 employees in a massive round of cuts as the company weathers its biggest revenue drop in more than a decade.
The layoffs, revealed in federally required announcements, will see 2,688 jobs cut from Tesla’s Austin headquarters and 3,332 jobs in California. The notices were made public the same day Tesla held its quarterly earnings call with investors, revealing a 9% drop in first-quarter revenue year-over-year, marking its biggest decline since 2012.
The announcement comes days after Tesla recalled thousands of its Cybertrucks over concerns that accelerator pedal pads may dislodge and stick, potentially causing the $100,000 vehicles to crash.
Despite the layoffs and recall, Musk boasted on X, formerly known as Twitter, about Tesla creating 30,000 manufacturing jobs in California over the past 14 years.
Musk informed his workforce about the planned layoffs last week in a memo obtained by CNBC and Electrek.
“As we prepare the company for our next phase of growth, it is extremely important to look at every aspect of the company for cost reductions and increasing productivity,” Musk said in the memo. “As part of this effort, we have done a thorough review of the organization and made the difficult decision to reduce our headcount by more than 10% globally,” he continued.
Tesla’s stock price dropped by about 5% the day the layoffs were announced. However, share values surged more than 10% following Tuesday’s earnings call, where Musk told investors that Tesla’s highly anticipated, more affordable electric vehicle models were on track to begin production early next year, sooner than the company originally promised.
