Tesla to layoff 6,000 employees in California and Texas amid slowing demand: Report

In a massive job cut rounds, Tesla has announced that it will lay off 6,020 employees in California and Texas, reported Reuters. As per the report, Tesla CEO Elon Musk is expected to outline the electric-vehicle maker's strategy to combat slowing demand and falling margins.

Layoffs by Tesla

As the company is reeling under pressure from dropping sales and an intensifying price war among EV makers, the firm last week announced that it would cut more than 10% of employees from its global workforce.

The company has disclosed the number of employees who would be affected in notices to the states of Texas and California on Monday, as under the US labor law companies with 100 or more employees are required to notify 60 days ahead of planned closings or mass layoffs.

By this, Tesla will cut 3,332 jobs in California and eliminate 2,688 positions in Texas, starting June 14. The job cuts in Texas represent 12% of Tesla's total workforce of 22,777 in the greater Austin area, where its gigafactory and headquarters are located. Meanwhile, the global job cuts would include 285 employees at its Buffalo, New York premises. The New York premises houses the labeling team for its Autopilot driver assistance software that makes fast-charging equipment.

As per company filings, the total headcount of the company late last year stood at over 1,40,000 which was up from around 100,000 at the end of 2021.

Tesla's CEO Elon Musk called the recent job cuts at Tesla a “necessary step" to reorganise the company for the next phase of growth. On Tuesday, the firm announced a big drop in its quarterly profits amid cut-throat competition in the electric vehicle market and layoffs. The world's top EV maker made $1.13 billion from January to March, down 55% from the year-ago quarter, on revenues of $21.3 billion.

Meanwhile, Tesla has disclosed its decision to prioritize utilizing its existing manufacturing capabilities rather than investing in new factories in countries like Mexico and India. The move comes as Tesla aims to increase its production by 50% from 2023 onwards, eyeing a capacity of nearly 3 million vehicles without expanding into new manufacturing lines.

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