Tesla has laid off its entire 40-person growth content ad team, according to a report from Bloomberg. The team was responsible for creating traditional advertising campaigns, which Tesla had historically avoided. However, in recent months, Tesla had begun to experiment with paid advertisements on TV, the internet, and billboards.
The layoffs come as Tesla faces a number of challenges, including supply chain constraints, rising costs, and a decline in demand. Tesla’s sales fell last quarter, and the company has lowered prices and cut production in an effort to boost sales.
Tesla CEO Elon Musk confirmed the layoffs on Twitter, saying that the ads were “too generic.” The team was led by Alex Ingram, who had worked in marketing for Tesla since 2020.
The team’s “maiden voyage” was only last month, with a livestream going over the details of the Tesla Cybertruck. That livestream was promoted by Musk and seen by 4.2 million people according to Twitter’s view count methodology.
The firings come as part of a volatile time for the company, which has also cut prices, lowered production, and paused hiring in the past week. All of this news comes in a month where Tesla announced its first year-over-year drop in deliveries.
I’ve never particularly thought that Tesla did need to push into advertising. While ads are effective and marketing is necessary for any business, Tesla has never had any trouble selling cars before, with nearly every quarter in the company’s history resulting in higher sales than the year prior. For a long time, Tesla has been supply-constrained, not demand-constrained, so it didn’t really matter if it advertised or not.
However, last quarter specifically, Tesla was very much supply-constrained. Inventory last quarter grew, as Tesla produced many more cars than it sold. This is precisely the time when a company could use a little advertising or marketing to manage the way its getting its name out in front of the public. This is especially true when the company’s other primary marketing outlet is an outspoken CEO who has recently dedicated his time more towards Twitter than to boosting Tesla. This has led to a decline in Tesla’s brand favorability, which is having a significant effect on people’s desire to buy the company’s cars.
One might say that Tesla’s poor performance over the last quarter is an example of why this team was cut, since their methods were clearly not effective given Tesla’s sales results. But the team hadn’t even had time to get off the ground yet, so it seems premature to axe it this early on.
There’s a lot of ways that traditional advertising is boring, and that utilizing new methods to their maximum extent can help companies reach new customers in more interesting and efficient ways. But I think firing a whole team that’s meant to explore those methods, while also relying on your company’s outspoken CEO (who’s seemingly more interested in Dogecoin and responding to /r/wallstreetbets memes on Twitter) to do the bulk of Tesla’s outreach, is probably not the best way to get out of a sales slump.
