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Tesla Will Lay Off More Than 10% of Workers

TechTesla Will Lay Off More Than 10% of Workers

Signs of turmoil at Tesla multiplied on Monday after the electric car company told employees it would lay off more than 10 percent of the work force to cut costs and a longtime senior executive announced his resignation.

The job cuts, amounting to about 14,000 people, come as the company faces increasing competition and declining sales.

“As we prepare the company for the next phase of growth, it is extremely important to look at every aspect of the company for cost reductions and increasing productivity,” Elon Musk, Tesla’s chief executive, told employees in an email, a copy of which was reviewed by The New York Times.

“There is nothing I hate more, but it must be done,” he wrote.

In a surprise announcement, Drew Baglino, a senior vice president who has played a key role in the company’s rise from unlikely startup to dominant electric car maker, said he had resigned.

“I made the difficult decision to move on from Tesla after 18 years yesterday,” Mr. Baglino said in a post on X, the social media site. Mr. Baglino is one of only three managers besides Mr. Musk listed as a top executive on the company’s website.

Investors often welcome job cuts because they can lead to higher profits. But that was not the case Monday as Tesla shares were down about 3 percent.

Mr. Musk’s email to employees was earlier reported by Electrek, an online news site, and Handelsblatt, a German business newspaper.

The move is the latest sign that Tesla may not be as unstoppable as it once seemed. The company’s sales are no longer growing at a rapid pace, and it has been slow to introduce new models. Automakers in Asia and Europe have been flooding the market with electric cars.

Mr. Musk’s many other ventures, and his penchant for making polarizing political statements, have raised questions about how focused he remains on managing Tesla. Wall Street is increasingly concerned about the company: Tesla’s share price has lost about one-third of its value this year.

This month, Tesla reported a decline in sales that caught investors off guard. The company said it delivered 387,000 cars worldwide in the first quarter, down 8.5 percent from the year before. It was the first time Tesla’s quarterly sales have fallen on a year over year basis since the start of the pandemic in 2020.

The company slashed prices significantly over the course of 2023 to increase demand, which has reduced the profit Tesla makes on each car. But that strategy appears to be losing its effectiveness.

Rivals like BYD of China, BMW of Germany, and Kia and Hyundai of South Korea reported increases in electric vehicle sales for the same period, suggesting that slower overall demand for battery-powered models was not the only explanation for Tesla’s problems.

Many of Tesla’s workers are based at four large car factories in Fremont, Calif., Austin, Texas, Shanghai or near Berlin.

Jason Karaian and Melissa Eddy contributed reporting.

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