Tesla plans to reduce its workforce by more than 6,000 employees in Texas and California, as shown in recent notices. This decision comes before CEO Elon Musk reveals the company’s strategy in the face of challenges like decreasing demand and shrinking margins.
Last week, Tesla suggested a global workforce cut of over 10%, citing market pressures and increased competition in the electric vehicle industry.
Specifics were disclosed in notifications submitted to state authorities, indicating 3,332 job cuts in California and 2,688 in Texas, scheduled to start in June. Despite these changes, Musk remains optimistic, highlighting Tesla’s creation of over 30,000 manufacturing jobs in California.
Despite the workforce adjustments, Tesla’s stock experienced a slight increase, breaking a previous downward trend. The reduction in Texas alone makes up 12% of Tesla’s workforce in the Austin area, where its main operations are located.
Furthermore, layoffs will impact several locations globally, including Buffalo, New York. This restructuring comes amid challenges such as the cancellation of a highly anticipated affordable model and slow updates to existing models, alongside a shift in consumer preference towards more affordable hybrid vehicles.
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