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The tech industry has been hit with wave after wave of layoffs this year, with job cuts affecting search engine companies, iPhone makers, and game-making firms. Now Elon Musk's flagship EV manufacturer, Tesla, has joined their ranks, with an announcement that it is cutting its global workforce by 10 percent. The layoffs come before Tesla unveils a new robot taxi vehicle, to be produced mostly by robots, as sales of its passenger cars slump amid a challenging EV market that's faltering after the company's recent period of rapid growth.
Electric vehicle news site Electrek reports that over the weekend Musk sent an email to everyone in the company to explain what was happening, confirming a spate of recent rumors that Tesla was indeed going to be laying off a significant number of staff. The total was only half of what the most extreme rumors tracked by Electrek, where a 20 percent total was on the grapevine at some point. Musk's email tells the story of the layoffs very succinctly, in a matter-of-fact way that's typical of the controversial entrepreneur.
Tesla has, over the years, "grown rapidly with multiple factories scaling around the globe," Musk explained. This speedy growth has inevitably led to "duplication of roles and job functions in certain areas." That's very believable, and is a problem that companies encounter when they scale--Tesla has been growing very rapidly, and is even attempting at the moment to expand its first Europe-based manufacturing facility in Berlin (a facility it opened in 2022 that it touts as its "most advanced" and "efficient" factory).
Then Musk got to the meat of the argument: "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," he wrote, not quite sugar-coating an explanation for the management's "thorough review of the organization." Their conclusion was that Tesla needs "to reduce headcount by more than 10 percent globally." Musk added a personal note: "There is nothing I hate more, but it must be done. This will enable us to be lean, innovative and hungry for the next growth phase cycle." He then thanked the departing staff for their work and steeled the remaining workers for the "difficult job that remains ahead" to help Tesla make "some of the most revolutionary technologies in auto, energy and artificial intelligence."
Electrek notes that Tesla appears to have acted swiftly, with some workers already locked out of system access--a move companies sometimes make to ensure that no proprietary data is "leaked" by disgruntled staff. The website Infosecurity Magazine reports that in general, "As many as 72% of departing employees admit to taking company data."
Meanwhile Electrek explains that Tesla's "roughly 10 percent" figure would equate to at least 14,000 people worldwide, noting that total employee numbers haven't risen especially rapidly in recent years, which makes "that line of the email ring somewhat hollow." Conversely, it could be said that this is a demonstration that Tesla is making good on its promise to be technologically advanced and efficient: robots have played a part in the car-making industry for years, but Tesla has taken that notion to a whole other level.
Just last week Tesla, arguably the world's most famous EV brand, revealed that in August it was going to unveil a new robotaxi vehicle--a car apparently based on a chassis designed to be smaller and cheaper than existing Tesla models. Market watchers speculate that the new model is designed to demonstrate that Tesla's self-driving technology is poised to change how people get about. This vehicle, which has stirred up plenty of debate and controversy, may even be manufactured in a new robot-centric way that ditches much of Henry Ford's assembly line system to lower costs of production, factory building, and the final price of the car itself.
Notably, a vehicle that's so reliant on automated assembly suggests it will need far fewer workers to produce it. Critics may argue Tesla is facing a dire crisis, as demonstrated by the broad wave of layoffs, though it's equally possible it's a sign the company is doubling down on the efficiency of its core business model.
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Tesla Reportedly Lays Off 10 Percent of its Workers, Globally
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15.04.2024
How Van Leeuwen Ice Cream's Laura O'Neill and Other Growth-Minded Entrepreneurs Keep Their North Star
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The tech industry has been hit with wave after wave of layoffs this year, with job cuts affecting search engine companies, iPhone makers, and game-making firms. Now Elon Musk's flagship EV manufacturer, Tesla, has joined their ranks, with an announcement that it is cutting its global workforce by 10 percent. The layoffs come before Tesla unveils a new robot taxi vehicle, to be produced mostly by robots, as sales of its passenger cars slump amid a challenging EV market that's faltering after the company's recent period of rapid........
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