Tesla plans to layoff 10 percent of global workforce amidst first quarter failings

Tesla intends to cut around 10% of its global workforce following a disappointing first quarter, according to multiple reports.

CEO Elon Musk announced the layoffs in an internal statement Monday, according to the Associated Press (AP). Musk highlighted the importance of restructuring the company to emphasize increased efficiency and cost-saving measures.

The anticipated layoffs could affect approximately 14,000 of the 140,473 employees at the Austin, Texas-based company.

Several key Tesla executives will also depart the firm. Andrew Baglino, a Tesla senior vice-president, announced his departure after 18 years at Tesla on Monday morning, according to the Wall Street Journal. Senior director Rohan Patel is also leaving the company after eight years.

Tesla's shares dropped by over 3% on Monday in response to the layoffs and executive departures. The company’s stock has lost around one-third of its value this year due to declining electric vehicle sales. Tesla's sales fell by nearly 9% during the first quarter, with 386,810 vehicles delivered compared to 423,000 the previous year.

To counter competition and lower demand, Tesla has implemented significant price reductions of up to $20,000 on some models. However, this has resulted in narrowing profit margins and a decrease in the value of used electric vehicles.