Musk Takes Cost-Cutting Measures: "Tesla Reduces Workforce by 14% This Year"

April's 10% Reduction Notice
Cost-Cutting Pressure on 'X' Too

Elon Musk, CEO of Tesla, is implementing significant cost-cutting measures at his companies experiencing declining sales. Tesla has reportedly reduced its workforce by 14% this year, and X (formerly Twitter) is also under pressure from Musk to cut staff in its sales team.

According to information obtained by CNBC on the 22nd (local time), Tesla currently has 121,000 employees worldwide, including temporary staff. This represents a reduction of about 14% (approximately 19,500 employees) from Tesla's total workforce of 140,473 at the end of last year. However, CNBC added that this figure is based on email records for all Tesla employees, not exact payroll data.

[Image source=Reuters Yonhap News]

In an email sent to "everybody" on the 17th, Musk stated, "Tesla will conduct a comprehensive review over the next few weeks to grant stock options to employees who have delivered outstanding performance," adding, "This reward will also be given to those who have made noticeable contributions to the company."

Tesla has been announcing major cost-cutting measures in response to declining sales caused by the downturn in the electric vehicle market. In an email to employees in April, Musk announced, "After a thorough review of the organization, we have made the difficult decision to reduce our global workforce by more than 10%." Later, during the first-quarter earnings report, he pointed out that "Tesla's inefficiencies, after a long period of prosperity starting in 2019, have reached a level of 25-30%." At that time, Tesla's annual revenue fell by 9% compared to the same period last year, marking the largest drop since 2012.

Tesla is not the only company facing cost-cutting pressure. According to major foreign media, Musk is pressuring Linda Yaccarino, CEO of X, to lay off sales staff in the US and UK and reduce spending in unnecessary departments. He has also reportedly dispatched his right-hand man, Steve Davis, CEO of The Boring Company, to X to review financial and performance management. X suffered a revenue hit last year as major advertisers left following Musk's anti-Semitism controversy. Bloomberg estimates that X's advertising revenue last year dropped by about 45% compared to 2021, before Musk's acquisition of Twitter.

Meanwhile, Tesla is scheduled to announce its second-quarter earnings in mid-next month. In August, it plans to unveil the design of its robo-taxi. Last week, Tesla's stock closed at $183.01, up 0.79% from the previous session. However, it has fallen 26% so far this year.

This content was produced with the assistance of AI translation services.