US carmaker Tesla is to cut more than a tenth of its workforce worldwide, equivalent to an estimated 14,000 employees, according to an internal email from Tesla boss Elon Musk pointing to a slump in the market for EVs and weak sales worldwide.
As part of efforts to cut costs and increase productivity, "we have done a thorough review of the organization and made the difficult decision to reduce our headcount by more than 10% globally," Musk writes in the email seen by dpa.
Tesla's staff complement stood at more than 140,000 at the end of last year, according to its annual report.
On Monday, top manager Drew Baglino also announced that he had decided to leave Tesla a day earlier. Baglino, who joined Tesla in 2006, recently played a key role overseeing batteries and motors. Head of policy Rohan Patel is also leaving, Bloomberg reported.
Details of the planned job cuts were not made public and it was unclear whether and how many jobs at Tesla's only European plant near Berlin might be affected. Many vacancies are still listed for Tesla's newest factory, which employs more than 12,000 people at the plant in Grünheide.
German business daily Handelsblatt reported that Grünheide would be affected by the jobs cut, citing internal Tesla sources.
Dirk Schulze, IG Metall trade union district manager for Berlin-Brandenburg-Saxony, said despite the many rumours and a declaration of intent from the company headquarters to cut more than 10% of staff globally, the works council at the site near Berlin did not have any further information as to how the plant would be affected.
However, the labour minister for the state of Brandenburg where the plant is located said he thought far fewer than 3,000 jobs would be cut at the Grünheide site. "If there are job cuts at Tesla in Grünheide, our information suggests that the number of jobs will not be around 3,000, but will be significantly lower," state economics and labour minister Jörg Steinbach told dpa.
Tesla surprised analysts by reporting a dip in sales in the first quarter, when it sold almost 387,000 vehicles, down from last year's figure by more than 8%.
US customers are buying cars powered by combustion engines or hybrids, and in China Tesla is experiencing competition from domestic manufacturers.
Attacks by Yemen-based Houthi rebels on shipping through the Red Sea has caused supply problems for production at Tesla's plant near Berlin. The plant was also hit by sabotage to its electric power supply earlier this year.
According to the email from Musk, rapid growth has led to a "duplication of roles and job functions in certain areas."
"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," Musk wrote.
Tesla shares fell in pre-market US trading. The shares have lost over 40% since reaching a high of almost $300 last summer. The stock is far from the record levels of more than $400 in autumn 2021.
Nonetheless, with a market capitalization of nearly $545 billion, Tesla is still the world's most highly valued car manufacturer, ahead of Japan's Toyota with 61.5 trillion yen ($398 billion).
German carmakers Volkswagen, BMW, Mercedes-Benz and Porsche lag far behind with a market capitalization of between €69 billion ($73 billion) and €85 billion.
