Tesla began closing departments due to financial problems

The reason for the decision was unsatisfactory financial performance. In 2023, price wars led to revenue problems. Despite delivering a record 1.81 million electric vehicles, the manufacturer’s profits have only declined.

Before this, Tesla management assured in an internal mailing that it would fire only ten percent of employees, and they would try to retain the most effective ones. But, as the publication’s interlocutor assures, the layoffs also affected the most talented employees. The thing is that they were working on projects that became less of a priority.

In an official statement, the automaker calls this a restructuring of the company. Tesla CEO Elon Musk, in an address to employees, emphasized that such measures are necessary to reduce costs and increase productivity.

Since the beginning of the year, Tesla has lost 40 percent of its capitalization. Investors are losing confidence in the company amid changes in its development trajectory and uncertainty regarding the prospects in the fight once morest Chinese manufacturers. In particular, the company abandoned plans to create a budget car and focused on creating a robotaxi.

Three top managers also left Tesla: Chief Financial Officer Zachary Kirkhorn, Vice President of Powertrains and Energy Drew Baglino and Vice President of Public Policy and Business Development Rohan Patel. At the same time, the latter directly cited changes in the company as the reason for leaving.