China effect! Big shocker for staff at Tesla.

Elon Musk, the CEO of Tesla, has announced that the company will be reducing its workforce by more than 10%. This decision was communicated through a memo, in which Musk expressed that it was a difficult but necessary step to keep the company lean and prepared for future growth phases. The layoffs are part of a broader effort to manage costs as Tesla faces challenges such as refreshing its aging vehicle models and competition from inexpensive electric vehicles (EVs) emerging from China.

The reduction primarily affects salaried employees, as Tesla aims to increase the number of hourly workers. This move comes amidst a backdrop of economic concerns and a shift in the EV market, with Tesla experiencing its first decline in vehicle deliveries in nearly four years. The company is also adjusting its production strategies, including reducing production at its Shanghai Gigafactory and shortening shifts for employees working on the Cybertruck at the Austin facility.