Tesla car manufacturer is on crisis. Cheap Chinese competition is getting closer in leaps and bounds. Tesla CEO Elon Musk is now announcing a radical austerity program that could put more than 20,000 jobs at risk.
At Tesla, the pioneer of electric cars, more than 20,000 jobs could be at risk, as the Austrian newspaper “Der Standard” now reports. In mid-April, Tesla announced a wave of layoffs in which ten percent of all employees worldwide would be laid off.
With a workforce of around 141,000 employees at the end of 2023, there would be about 14,000 employees. However, the announcement was only the beginning of an even broader austerity program, according to the report.
Musk probably has no consideration in firing him
Tesla CEO Elon Musk announced an “absolutely tough” approach in an email to company executives. This can be interpreted as Musk's intention to carry out the layoff program “mercilessly.”
Managers who fail an “excellence and reliability” test developed by Musk should also be included on the list of those “worthy of dismissal.” Along with all the staff that he works under his orders.
Tesla has already initiated exemptions: Rebecca Tinucci, among others, has been released. She held the title “Senior Director of Electric Vehicle Charging” and was involved in Tesla charging technology issues. Around 500 employees worked under Tinucci's orders. Daniel Ho, director of the new vehicle program, met with a second senior Tesla manager. Ho doesn't have to go alone either, but with his entire team.
Grünheide employees were also affected
In 2022, Tesla opened its only European gigafactory in Grünheide, Brandenburg. Currently 12,500 employees work there. They are also likely to see broader job cuts than previously known. Recently there was talk of about 400 layoffs.
Are 20 percent of all jobs at Tesla now about to be eliminated?
According to the report, the exact effects of the “hard” austerity program are still unclear. However, this could cause Tesla to lay off up to 20 percent of its workforce.
The report describes the dissolution of Tinucci's “Supercharger team” as particularly notable. The move could signal a change in strategy at Tesla. The company had previously struggled to persuade other automakers to adopt the “North American Charging Standard” developed by Tesla.
The cost-cutting measures are intended to help Tesla get through a difficult phase. The electric car maker suffers from increasing competition, especially from China, and a weakening electric car market.
In response, Tesla has lowered prices several times in the past. Although this kept sales figures reasonably high, profits came under enormous pressure. The result: Tesla's stock price plummeted to its lowest level in six years.
Elon Musk is planning a cheap Tesla: can it work?
Market watchers agree: Tesla won't return to its former heights by simply cutting costs. Musk recently announced that he would launch a cheap model this year to curb Chinese competition. Elon Musk will only be able to bring peace of mind to the company if it continues to generate profits for its shareholders in the future.