'Reduce Cost, Increase Productivity': Elon Musk On Tesla's Decision To Lay Off Over 14,000 Employees

Musk wrote to his Tesla employees, "There is nothing I hate more, but it must be done." About 10 per cent of employees will get affected by the layoffs.

Musk's announcement comes on the heels of a noticeable decline in Tesla's auto deliveries, despite the company's attempts to invigorate sales by reducing prices on their electric vehicles ( Image Source :Getty )

Tesla, the Elon Musk-owned electric vehicle (EV) major, has recently disclosed plans to reduce its workforce globally by over 10 per cent, as reported by electrek.com, based on an internal memo shared by Musk with employees. This move is projected to affect around 14,000 employees across the company. The decision stems from identified redundancies in roles following periods of rapid expansion, emphasizing the need for a leaner operation to enter the next growth phase effectively.

What Musk Said

Elon Musk has communicated through an internal memo that the company needs to enhance productivity and cut costs to gear up for future challenges and opportunities.

Here's what he reportedly wrote: "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. As part of this effort, we've done a thorough review of the organisation and made the difficult decision to reduce our headcount by more than 10 per cent globally. There is nothing I hate more, but it must be done."

Decline In Tesla Sales

The announcement comes on the heels of a noticeable decline in Tesla's auto deliveries, despite the company's attempts to invigorate sales by reducing prices on their electric vehicles. This suggests a strategic reassessment within Tesla to align its operations with current market dynamics and future goals.

Foray Into India

Amid these organisational changes, Elon Musk plans to visit India to meet Prime Minister Narendra Modi. This meeting is expected to be significant, especially as Musk has hinted at opening a new manufacturing facility in India. His interest in the Indian market follows recent policy shifts in the country, which include substantial tax reductions on imported EVs and incentives for establishing local manufacturing.

As Tesla prepares to realign its workforce and expand into new markets, the global EV industry watches closely. The company's strategies, both in terms of internal restructuring and external expansion, will likely influence its position as a leader in the electric vehicle sector and shape its operations in emerging markets such as India.