Industry

Tesla (TSLA) is rumored to be preparing a massive round of layoffs

Tesla announced to Gigafactory Texas employees that it will shorten Cybertruck production shift amid rumors that it is preparing a round of layoffs.

We received several reports today from Tesla employees hearing rumors of an important round of layoffs happening this week at the company.

Some of them are talking about layoffs as high as 20% of the workforce, which would mean tens of thousands of employees.

The rumors come after Tesla angered some employees with delayed performance reviews and price bumps earlier this year.

They also come after Tesla had quite a disastrous quarter with a year-over-year reduction in deliveries, which came way below even the most pessimistic analyst estimates.

As we noted, Tesla had some good excuses regarding production going down this quarter, which would also affect deliveries and the logistics of getting cars to customers, but it didn’t have a good explanation for adding 46,000 vehicles to its inventory in a single quarter.

The automaker has been consistently adding cars to its inventory over the last year and CEO Elon Musk has been mostly blaming the situation on pricing and high interest rates.

Tesla has been expected to reduce production to adjust for what appears to be clear lower demand.

Last month, the automaker reduced production at Gigafactory Shanghai, its most productive factory.

Today, it was reported that Tesla shortened its Cybertruck production shifts at Gigafactory Texas.

Tesla wouldn’t be the only big tech company doing layoffs. Several other major companies have recently announced layoffs, including Apple – although to a much lesser degree than what is being rumored now.

Musk has recently expressed concerns about the global economy, and he has slowed things down at Tesla because of it, like the GIgafactory Mexico project, for example.

Electrek’s Take

Tesla has often implemented yearly waves of layoffs, which the automaker has attributed to hiring inefficiencies amid rapid headcount growth and getting rid of underperformers.

However, if the rumors proved to be true, this one feels different. It comes after an obviously very bad quarter and comes with Tesla reducing production capacity.

Also, Tesla hasn’t been growing its headcount as much and as fast as it used to – making it harder to blame it on rapid growth.

Whether the rumors are true or not, they are clearly currently spreading at Tesla, and that’s stressful for employees. Job insecurity is not fun. I wish the people at Tesla the best right now.

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