Tesla is eliminating around 12% of its workforce at a factory in Austin, Texas, as part of a broader restructuring the company announced last week. According to a Worker Adjustment and Retraining Notification (WARN) Act letter on Tuesday, the layoffs affect 2,688 employees at the facility in Travis County.
In 2021, Tesla CEO Elon Musk moved the company’s corporate headquarters to Austin from Palo Alto, California. Musk said in an internal memo last week that Tesla was cutting more than 10% of its global headcount as the electric vehicle maker reckons with flagging sales and increased competition. He didn’t say which departments or locations would be most impacted.
“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,” he wrote.
A subsequent WARN notice filed in New York indicated that 285 of positions were being eliminated at a factory in Buffalo.
Tesla employed 140,473 people as of December, according to filings. Tesla officially opened its Texas EV and battery factory in April 2022, with a “cyber rodeo” party. The company now manufactures some of its Model Y crossover utility vehicles in Austin, and has started to build its Cybertruck there.
Musk later called the Austin factory, and another assembly plant in Germany, “gigantic money furnaces,” in an interview with Tesla Owners Silicon Valley, a fan club that promotes Tesla vehicles.
According to filings with the Texas Department of Licensing and Regulation revealed, Tesla was planning to spend upward of $770 million last year on the construction of expanded facilities in Austin, including for battery cell testing and manufacturing, cathode and drive unit manufacturing, and a die shop, among other things.
Tuesday’s WARN filing said that “none of the employees are represented by a union and none of the employees have bumping rights,” or the right of more senior workers to replace those with less seniority.
Executives are expected to discuss the restructuring on the company’s quarterly earnings call at 5:30 p.m. ET.
