Tesla job cuts include workers in the US and China, but Germany is unclear

Tesla's global job cuts include reducing staff in the U.S. and China, the automakers' two biggest markets, across sales, tech, and engineering, five sources briefed on the matter said. The cuts also reportedly included high-performing employees. And according to one report, some Tesla workers discovered they were out of a job when their badges wouldn't scan.

CEO Elon Musk on Monday told staff in an internal memo seen by Reuters that the company is laying off more than 10% of its global workforce, as it grapples with falling sales and an intensifying price war for electric vehicles.

A company source told TechCrunch that managers told their employees the layoffs — 20% in some departments — were largely due to poor financial performance.

The layoffs come just a week before Tesla reports first-quarter earnings. Its profit margin has narrowed over the past few quarters, the result of an EV price war that Tesla itself kicked off, with its margins taking a hit. Global vehicle deliveries in the first quarter fell for the first time in nearly four years, as price cuts failed to stir demand.

Several U.S.-based service centers saw heavy layoffs effective immediately, primarily of sales staff and technicians, one source told Reuters. Another location laid off all front-of-house staff, the source said. A Tesla program manager in California posted a spreadsheet on LinkedIn of over 140 staff, mostly engineers, who had been laid off and were seeking new jobs.

The stock tumbled about 4% to below $154 at one point on Tuesday in New York, bringing this year’s drop to some 38%. Tesla shares are the second-biggest decliner on the S&P 500 Index in 2024, erasing more than $290 billion in value since year-end. The company hasn’t closed with a market value under $500 billion since late April of last year.

“The sweeping layoffs announced yesterday, amounting to a reduction in crewed production capacity, should now leave no doubt that the decline in deliveries has been a function of lower demand and not supply,” said Ryan Brinkman, an analyst at JPMorgan Chase & Co. 

Many of the laid-off employees were high performers, according to two sources who spoke to TechCrunch on condition of anonymity.