Tesla intends to eliminate 6,000 positions as part of ongoing layoffs

As part of its plan to deal with dwindling demand and shrinking profit margins, Tesla intends to fire 6,020 workers in Texas and California, according to the news agency Reuters.

This occurs while the corporation is under growing pressure from declining sales and heightened competition in the electric car sector. According to media sources on Tuesday, the EV maker saw a fall in its quarterly profitability for the first time since 2020.

Elon Musk, the CEO of Tesla, is anticipated to elaborate on the company’s approach at a meeting on Tuesday. Tesla made a suggestion this week about cutting more than 10% of its personnel worldwide, but it did not say how many workers will be impacted specifically.

Notifications were delivered on Monday to the states of Texas and California, stating that Tesla would begin laying off 2,688 employees in Texas and 3,332 employees in California, effective June 14.

These notices comply with labor rules in the United States, which require firms employing 100 people or more to provide a 60-day notice period prior to any significant layoffs or closures.

Musk emphasized Tesla’s role in creating employment in California in a social media post on Tuesday, claiming that the business had produced over 30,000 manufacturing jobs in the state.

Nonetheless, around 12% of Tesla’s employees in the Austin, Texas, region—which is home to the company’s gigafactory and headquarters—will be impacted by the job losses in Texas.

Furthermore, 285 workers at Tesla’s Buffalo, New York, facility—which houses the labeling team for its Autopilot driving assistance software—will be impacted by the layoffs.

According to documents submitted to US authorities, Tesla’s employment has increased over the last several years, from over 100,000 in 2021 to over 140,000 by the end of last year.

The choice to reduce size was made in the midst of difficulties for Tesla, which included the abandonment of a long-promised inexpensive vehicle that was expected to cost around $25,000, as noted by Reuters on April 5.

It was expected that the company’s mass-market expansion would be fueled by the inexpensive strategy. Furthermore, Tesla has been sluggish to update its current models as rivals in China, the world’s biggest car market, are launching less expensive substitutes.

Moreover, because of the longer driving range of gasoline-hybrid cars, buyers are choosing these less costly models more and more, which presents additional difficulties for Tesla in retaining its market share and financial success.