Tesla has reportedly downsized its workforce across various departments as part of a restructuring effort. The automaker had previously announced a 10% reduction in staff three weeks ago, affecting workers in software, service, and engineering roles.
According to reports, the recent job cuts are attributed to Tesla CEO Elon Musk’s acknowledgment of hiring inefficiencies in recent years and the company’s preparation for a new phase of growth. These layoffs come on the heels of lower-than-expected vehicle deliveries and a decline in financial performance.
Tesla disclosed plans to lay off over 6,700 employees at its locations in Texas, California, Nevada, and New York, aiming to reduce costs by more than $350 million in the second quarter. Analysts believe that these cost-cutting measures could be aimed at reallocating funds for projects such as autonomous driving software, robotaxis, and robotics.
During a recent earnings call, Musk emphasized Tesla’s identity as an artificial intelligence (AI) and robotics company rather than just an automobile manufacturer. The company has focused on optimizing operational efficiency, driving profitable growth, and introducing new, more affordable products.
Tesla’s stock saw a significant boost following announcements of showcasing a purpose-built robotaxi in August and accelerating production on a new, lower-cost model. Musk reiterated the company’s commitment to an electric and autonomous future, reflecting Tesla’s evolving vision beyond traditional automotive manufacturing.
