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Tesla lays off more staff in service and software team: Know why?

Tesla has laid off staff from the software, service and engineering departments as the automaker disbanded its EV charging department following Tesla's announcement last month which reduced its global workforce by more than 10 per cent.

Edited By: Saumya Nigam @snigam04 New Delhi Published on: May 07, 2024 19:07 IST
TESLA
Image Source : FILE Tesla lays off more staff in the service and software team

Tesla, an e-automobile headed by Elon Musk has reportedly laid off staff from the software, service and engineering departments- tech publication Electrek reported on Monday, citing sources familiar with the matter.

The move took place after the Elon Musk-led automaker disbanded its EV charging department following Tesla's announcement last month that it was reducing its global workforce by more than 10 per cent.

The layoff announcement was made via emails to the employees over the weekend.

Reasons for the layoff?

Employees at the automaker received emails over the weekend as part of broader layoffs, according to the Electrek report.

Tesla, whose shares were up more than 1 per cent, did not respond to a Reuters request for comment, immediately.

Layoff of 6,700 employees in April 2024

The company also disclosed in notices last month that it will lay off more than 6,700 employees across its locations in Texas, Nevada, New York and California.

Reason: Drop in sales

Tesla has been under pressure from dropping sales and an intensifying price war among automakers as elevated interest rates have slowed the adoption of electric vehicles.

Autonomous driving software

The company is looking to focus on autonomous driving software, robotaxis and its humanoid robot Optimus, and Musk could be cutting its spending on certain teams to preserve cash for those projects, analysts have said.

Tesla disclosed last month it expects to book more than USD 350 million in costs in the second quarter for the mass layoffs. The job cuts also included an exodus of top executives, including Drew Baglino, Rohan Patel, Rebecca Tinucci and Daniel Ho.

In April, the company said that it was working on "new models" that would use its current platforms and production lines - a move that is expected to let it better control capital expenditures.

It was just the start of May when Musk announced disbanding the charging team of Tesla in a new layoff round, which was unexpected. The layoffs at the Supercharger network took place despite of onboarding top automakers like Ford and General Motors. 

Also, in April,  Musk said to reorganise Tesla and it's team as the electric car company, which has reportedly registered for USD 1.13 billion for the net profit in January-March (2024) which was down by 55 per cent from USD 2.51 billion in 2023.

Inputs from Reuters

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