In a move that has rattled employees, Tesla managers are reportedly assessing the criticality of each position within the company, fueling fears of potential layoffs. According to media reports, Tesla initiated this evaluation by asking managers to determine the necessity of each employee’s role, a decision that follows the cancellation of biannual performance reviews for some staff members.
While Tesla has yet to respond to requests for comment on the matter, the implications of this inquiry are significant for the company’s workforce, which numbered 140,473 globally as of December 31 last year. News of the internal evaluation coincided with a 2.7% rise in Tesla’s premarket trading shares, although the company’s stock has experienced a decline of over 25% since the beginning of the year.
The report comes amidst CEO Elon Musk’s recent cautionary statements regarding Tesla’s sales growth trajectory for the year. Despite implementing price cuts to stimulate demand, which have adversely affected margins, the world’s most valuable automaker faces challenges in sustaining its sales momentum amid stiff competition and shifting market dynamics.
Particularly concerning for Tesla is the deceleration in sales growth projected for the upcoming year, a development compounded by the impact of price reductions on profit margins. Moreover, the Chinese market, a pivotal region for electric vehicle (EV) sales, witnessed a slowdown in demand, marking the first month-on-month drop in new energy vehicle sales in January.
In the face of mounting pressure, Tesla’s market position has encountered headwinds, notably losing its status as the leading EV manufacturer by sales volume to Chinese automaker BYD in the fourth quarter. This reversal underscores the intensifying competition within the EV sector and underscores the urgency for Tesla to navigate market challenges while maintaining operational efficiency.
As Tesla grapples with these complexities, the internal evaluation of job roles raises questions about the company’s strategic direction and its efforts to optimise its workforce to align with evolving business priorities. The outcome of this assessment could potentially reshape the composition of Tesla’s workforce and signal broader organisational adjustments in response to shifting market conditions.
With layoff concerns looming, employees await further clarity from Tesla management regarding the implications of the job criticality evaluation and its potential impact on the company’s workforce structure. As Tesla navigates a pivotal juncture in its growth trajectory, stakeholders remain vigilant for developments that could shape the future trajectory of the electric automaker amid a rapidly evolving industry landscape.