Tesla is reported to harbor plans of laying off more than 10% of its global workforce, according to an internal memo seen on Monday as it grapples with falling sales amid an intensifying price war for electric vehicles.
Tesla CEO Elon Musk said in the memo that, “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 have done a thorough review of the organization and made the difficult decision to reduce our headcount by more than 10% globally,” it said.
Tesla shares were down 0.3% in premarket trading on Monday.
The planned job cuts come after Tesla reported earlier this month that its global vehicle deliveries in the first quarter fell for the first time in nearly four years, as price cuts failed to stir demand.
Tesla, which reports quarterly earnings on April 23, is braced for a slowdown in 2024 after years of rapid sales growth.
Tesla had previously laid off 4% of its workforce in New York in February last year as part of a performance review cycle and before a union campaign was to be launched by its employees.
The EV maker has been slow to refresh its aging models as high interest rates have sapped consumer appetite for big-ticket items, while rivals in China, the world’s largest auto market, are rolling out cheaper models.
Earlier this month, it was reported that Tesla has cancelled a long-promised inexpensive car that investors have been counting on to drive mass market growth.
The company is looking to shore up its margins, which have been dented by repeated price cuts.
It recorded a gross profit margin of 17.6% in the fourth quarter, the lowest in more than four years.
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