Elon Musk Announces 10% Layoffs at Tesla Amid Criticism Over Employee Treatment

Tesla lays off 10% of workforce, sparking concerns over employee treatment. Abrupt cuts impact visa-holding staff, as company faces market challenges. Musk apologizes for severance issues, vows to position Tesla for future growth.

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Elon Musk Announces 10% Layoffs at Tesla Amid Criticism Over Employee Treatment

Elon Musk Announces 10% Layoffs at Tesla Amid Criticism Over Employee Treatment

Tesla CEO Elon Musk announced that the electric vehicle manufacturer will lay off around 10% of its workforce, or approximately 14,000 jobs, prompting criticism and concerns about the treatment of the company's employees. The layoffs were effective immediately and impacted various departments, including sales, engineering, and recruiting staff.

In an internal email to employees, Musk cited the need to eliminate "duplication of roles and job functions" as the company prepares for its "next phase of growth." He acknowledged the difficulty of the decision but stated it was necessary to streamline the organization and increase productivity.

However, the abrupt nature of the layoffs has caused distress among affected employees. Sneha Karnik, a Business Process Analyst at Tesla who was among those laid off, expressed her shock in a LinkedIn post: "Getting laid off is never easy, but it's especially disheartening and distressing when it happens so suddenly, without any prior warning." As an employee on an F1-OPT visa, Karnik now faces the added challenge of securing new employment within a 60-day window.

The layoffs come amidst several challenges Tesla has faced, including an $80 billion loss in market value, a 20% decline in vehicle deliveries, and ongoing legal battles over its Autopilot self-driving technology. Two senior Tesla executives, SVP of powertrain and electrical engineering Drew Baglino and VP of public policy and business development Rohan Patel, also resigned on the same day the initial round of cuts was announced.

Why this matters: The mass layoffs at Tesla raise concerns about the treatment of employees and the broader implications for the electric vehicle industry as its trailblazers begin to falter. The abrupt nature of the job cuts and the challenges faced by affected employees, particularly those on visas, highlight the human impact of corporate restructuring decisions.

Musk has apologized for "incorrectly low" severance packages received by some laid-off employees, acknowledging discrepancies and assuring prompt resolution of the issue. The company plans to discuss its first-quarter results and future strategy with shareholders on April 23. As Musk stated in his email, "I have put maximum effort and perseverance into achieving our goals, and this restructuring is a necessary step to position Tesla for future growth and success."

Key Takeaways

  • Tesla to lay off 10% of workforce, around 14,000 jobs, to streamline operations.
  • Layoffs impacted various departments, causing distress among affected employees, including visa holders.
  • Tesla faces challenges, including $80B market value loss, 20% delivery decline, and Autopilot legal battles.
  • Two senior Tesla executives resigned on the same day as the initial round of cuts.
  • Musk apologized for "incorrectly low" severance packages, promising prompt resolution.