Elon Musk issued a company-wide memo confirming Tesla's mass layoffs, affecting thousands.
The automotive giant, Tesla, is in a phase of restructuring, beginning with the announcement of a 10% global workforce reduction via a company-wide memo.
On the same day, two major executives announced their departures, including Tesla's "number two," Andrew Baglino, who previously ranked just below Musk in the company hierarchy, surpassing rumored successor candidate Zhu Xiaoming.
Baglino served at Tesla for 18 years, witnessing the company's journey from startup to the summit. However, he unexpectedly announced his departure when the massive layoffs arrived. Elon Musk issued a company-wide memo at Tesla, which was concise, focusing solely on one matter: a global reduction in workforce by 10%.
At the end of last year, documents submitted by Tesla to regulatory authorities revealed that Tesla has over 140,000 employees globally.
This means Tesla is set to cut approximately 14,000 jobs worldwide, with reports citing sources suggesting that certain departments may face cuts of up to 20%.
In his letter, Musk explained the reasons for the layoffs:
He stated that over the past few years, the company has expanded rapidly worldwide, and this rapid growth has resulted in some duplicate redundant positions within the company.
Now, as the company prepares to enter the next phase, cost reduction and efficiency enhancement are crucial.
Therefore, the company needs to reduce its workforce by 10%.
Musk described it as something he hated to do but deemed necessary, calling it a "difficult decision."
In the end, Musk expressed gratitude to the employees.
The all-staff email was candid and straightforward.
The layoffs were aimed at reducing costs and increasing efficiency, as Tesla prepares to embark on a new phase.
The era of rapid growth has passed, and Tesla now faces new challenges both internally and externally.
In the external environment, Tesla faces a triple challenge:
On a global scale, the growth of electric vehicles is slowing down, with some automakers lowering their delivery expectations.
In terms of government policies, to protect the interests of traditional car manufacturers, the United States has reduced its support for electric vehicles, relaxed automotive tailpipe emissions standards, and lowered its targets for the development of pure electric vehicles.
More importantly, competition facing Tesla, especially from Chinese car manufacturers, is intensifying.
The external situation is grim, as evidenced by Tesla's first-quarter deliveries falling short of expectations.
In the first quarter, Tesla delivered 387,000 vehicles globally, significantly lower than the market's expectation of 457,000 units.
Compared to the previous quarter, deliveries dropped by 20.2%.
Year-on-year, there was a modest decrease of 8.53%, marking the first annual decline in deliveries for Tesla in four years.
Facing external challenges, Tesla is also gearing up for new ventures internally:
Elon Musk previously announced that Tesla's Robotaxi service would launch on August 8th.
Despite the rave reviews from numerous car owners about the end-to-end visual performance of FSD, especially since its evolution to V12, with some even claiming it surpasses Waymo's autonomous vehicles, transitioning from L2+++ advanced driver assistance systems to L4 autonomous driving is no easy feat. It inevitably encounters numerous technological and organizational challenges. Tesla faced substantial internal and external hurdles, and the culmination was a mass layoff, marking the end of its golden era of rapid expansion. The departure of two key executives completed the other half of the story.
This has also brought new shock and questions to the outside world.
Two top executives resign on the same day
On the same day Elon Musk released a company-wide memo, Tesla's number two figure, Andrew Baglino, Senior Vice President of Powertrain and Energy, and Rohan Patel, Vice President of Public Policy and Business, both announced their resignations.
Andrew Baglino joined Tesla in March 2006, shortly after its founding when the company's first car, the Roadster, had not yet been unveiled.
During his eighteen years at Tesla, Baglino rose from an electrical engineer to Senior Vice President, a position second only to Musk himself, even ranking higher than JB Straubel.
△Tesla Investor Day 2023, with Zachary Kirkhorn, then CFO, on the left and Baglino on the right.
Baglino's departure was equally sudden.
Last August, shortly after Zachary Kirkhorn, also among Tesla's "Big Four" executives, announced his departure, Tesla swiftly updated its website to introduce his successor, maintaining the roster of the "Big Four."
However, following Baglino's departure announcement, Tesla's relevant webpage now lists only three individuals.
The other executive, Patel, has not been with Tesla for as long, but has served for 8 years, holding the position of Vice President of Public Policy and Business Development at Tesla. Prior to this, he had a stint in politics.
Both individuals posted similar messages on social media platforms: expressing gratitude to their teams and Elon Musk, stating their current intention to spend time with family, and indicating uncertainty about their next destination.
Elon Musk responded to each message with expressions of gratitude.
Both individuals did not specify the exact reasons for their resignations in the announcement.
Patel merely hinted to the media privately that the departure was due to a "Big overall change" within the company but declined to elaborate further.
One More Thing
Previously, Musk announced that Tesla's FSD would be available to vehicle owners for free for one month, but the story doesn't end there.
Tesla has recently introduced a discount policy, reducing the original $199/month FSD subscription to just $99/month (approximately ¥716/month).
With FSD now half-price, this move is expected to boost FSD subscription rates, increase the user base, and accelerate the capabilities, thus better supporting Musk's Robotaxi plan.
Will there be another delay on August 8th?
Moreover, regarding the introduction of FSD in China, is there a need to expedite the process and continue the U.S. strategy, considering a half-price promotion to engage in a price war for autonomous driving technology?
