Tesla Cutting Jobs Across Departments as Part of Restructuring

Tesla has reportedly laid off employees across several departments over the last three weeks.

These job cuts follow the automaker’s announcement three weeks ago that it was laying off 10% of its workforce, Electrek reported Monday (May 6).

Workers in software, service and engineering roles have been impacted by the layoffs, according to the report. 

Tesla CEO Elon Musk has said that the job cuts are due to the automaker’s hiring inefficiencies in recent years and its restructuring for a new phase of growth, per the report.

They also follow Tesla’s lower-than-expected vehicle deliveries and diminished financial performance, the report said. 

The automaker disclosed in April that it will lay off more than 6,700 workers at its locations in four states: Texas, California, Nevada and New York, Reuters reported Monday.

Tesla expects the layoffs to reduce costs by more than $350 million in the second quarter, the report said.

Analysts have suggested that the company could be cutting costs on some teams to preserve cash for other projects like autonomous driving software, robotaxis and robots, per the report.

During Tesla’s quarterly earnings call on April 23, Musk said the company should be considered an artificial intelligence (AI) and robotics company rather than an automobile manufacturer.

“We are an AI, robotics company — if you value us otherwise, the right answer is impossible to the questions being asked,” Musk said during the call. “If someone doesn’t believe Tesla will solve autonomy, they should not be an investor in the company.”

In materials released in conjunction with the call, Tesla said it had undertaken cost cutting to increase operational efficiency, focusing on profitable growth and leveraging existing factories and production lines to introduce “new and more affordable products.”

The company’s stock, which had been trading significantly down, jumped double digits on the news that Tesla plans to showcase its purpose-built robotaxi in August and that the company’s production was accelerating on a new, lower-cost Tesla model, PYMNTS reported April 24. 

“We’ll be showcasing our purpose-built robotaxi, or Cybercab, in August … we’re really headed for an electric vehicle, an autonomous future,” Musk told investors during the call.