According to a notice sent to the state government, Tesla intends to lay off 601 more employees in California as part of a global series of job cuts initiated a month ago due to declining sales and intensifying price competition.
Tesla Aiming to Reduce Workforce by 10%
Tesla CEO Elon Musk announced on April 15 that the company would lay off over 10% of its global workforce, which numbered over 140,000 in late 2023. Since then, the electric vehicle maker has implemented multiple rounds of job cuts as Musk aimed to reduce headcount by 20%, as reported by sources familiar with the matter.
Revealing Additional Layoff in California
Despite criticism, Tesla is proceeding with its significant workforce reduction plan. On Monday, it submitted paperwork to the State of California revealing that 223 individuals at its Palo Alto site and 378 at its Fremont factory would be permanently laid off, scheduled to commence within 14 days starting on June 20, 2024.
Both the Palo Alto, which serves as one of Tesla's primary development and manufacturing centers responsible for designing and constructing powertrain equipment and serves as the engineering headquarters for the entire brand and the Fremont factory, which is a full-scale production facility featuring five assembly lines, are essential to the brand's success, as almost all Tesla models currently available for sale, with the exception of the Cybertruck, are manufactured there.
Tesla's Series of Layoffs to Be Hardcore About Headcount and Cost Reduction
Last month, the electric carmaker announced plans to lay off 6,020 employees in California and Texas as part of its overall headcount reduction efforts. The global job cuts also affected 285 employees at its facilities in Buffalo, New York, where the labeling team for its Autopilot driver assistance software is located, as well as where fast-charging equipment is manufactured.
SFChronicle reports that 600 workers will leave the automaker over two weeks in mid-June. When combined with the 2,700+ job cuts announced in the Bay Area earlier this year and the 2,688 positions eliminated in Texas, Tesla has eliminated at least 5,989 jobs this year, aligning with the 6,020 employees it projected it would cut earlier this year. However, Tesla is reportedly rehiring individuals previously laid off from its disbanded Supercharger team, so the final number of job cuts may differ.
These cuts are all part of Tesla's effort to reduce its workforce by 10% to decrease overhead costs and enhance efficiency across its operations as Tesla seeks ways to rebound amid significant drops in revenue and profit during the first quarter of 2024. The first set of layoffs affecting Bay Area employees will commence on June 14, followed by the second set on June 20, with each set taking about two weeks to be fully implemented. While it remains uncertain when workers will be informed about their employment status, some may already be aware of their situation.
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