It Sure Looks Like Layoffs Are Coming To Tesla

Tesla staffers are getting ready for potential job cuts after managers at the Austin, Texas-based automaker were asked to let higher-ups know if each of their employees’ positions are critical. I’m sure this will all go just fine for Tesla and its workers.

Tesla’s Cybertruck Has Finally Arrived

U.S. managers had to make the yes-or-no assessments of their deputies’ roles in the past week, according to anonymous sources who spoke with Bloomberg. Tesla apparently sent out the single-line query for each job after canceling some employees’ biannual performance reviews, the people told the outlet. That is… not great.

The ask is reportedly consistent with Tesla CEO Elon Musk’s emphasis on cost-cutting that has come about as the electric vehicle market faces a pretty steep slowdown. The news has been tough for Tesla, which is losing market share to both legacy automakers and other startups. However, it’s still got a huge piece of the EV pie. So far this year, Tesla’s stock has dropped about 26 percent, wiping away hundreds of billions in valuation.

During Tesla’s quarterly earnings call last month, Musk reportedly said the company was “between two major growth waves.” The first wave was the introduction of the Model 3 and Model Y, and the next is supposed to be some sort of lower-cost vehicle on the horizon. I suppose that means Musk also realizes the Cybertruck is not a serious vehicle.

Here’s how Tesla’s headcount has fluctuated over the past few years, according to Bloomberg:

Tesla has roughly doubled its workforce since 2020, ending last year with more than 140,000 people on staff globally. The company employs about eight times as many people as it did in 2016, the year before the Model 3 sedan launched.

Headcount increased almost 10% last year even as Tesla made select cutbacks. In February 2023, the company terminated dozens of employees in Buffalo, New York, who labeled data for its driver-assistance system Autopilot. The carmaker denied that it had fired the workers in response to a union campaign announced that week.

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In a blog post on the job cuts in Buffalo around this time a year ago, Tesla said it rates employees’ performance on a scale of 1 to 5 every six months, and that it had scheduled “exits” for low performers roughly two months ahead of their reviews.

Tesla has periodically done layoffs in the past even as it continued to recruit for certain roles. The company has hundreds of job listings on its website.

The move is not all that dissimilar to what Musk did at his latest venture, Twitter, when he took over. Musk laid off over 80 percent of the social media website’s staff after buying the company which is now called X. For those who are left, he gave them an ultimatum to either commit to his “hardcore” vibes or leave — tough choice.

So, layoffs may be coming to Tesla. Are you really that surprised?