Amid widespread tech industry layoffs, Elon Musk has instructed Tesla managers to pinpoint key employees, raising fears of impending job cuts within the company.
Elon Musk has requested Tesla managers to assess employee performance, while the company has canceled its regular biannual performance review meeting. Instead, managers are tasked with completing a single-line query for each employee.
The tech industry is experiencing another round of layoffs, though not as extensive as the massive layoffs in 2023. Hundreds of employees across various departments globally are being affected. Major companies like Google, Meta, Amazon, Snap, and others have recently announced their intentions to reduce their workforce as part of restructuring efforts.
In light of these developments, there is speculation that Elon Musk may also be considering layoffs. However, unlike his previous involvement with X (formerly Twitter), the specific target of these potential layoffs remains unclear.
Elon Musk, known for cutting nearly half of Twitter’s global workforce, is now reportedly considering layoffs at another of his companies – Tesla. Bloomberg reports that Musk has instructed Tesla managers to evaluate their employees’ work and determine which roles are essential. The company has scrapped its usual biannual performance review meeting and replaced it with an unconventional assessment process, where managers must fill out single-line queries for each employee. This departure from the norm has raised concerns about possible layoffs within Tesla.
The employee evaluation at Tesla appears to be influenced by Elon Musk’s cost-cutting approach amid the company’s slowing sales growth. Known for his demanding leadership style, Musk previously urged Twitter employees to adhere to his “hardcore” philosophy.
It’s worth noting that despite the challenges faced by other tech companies, such as X experiencing revenue declines and poor performance on Wall Street, Tesla’s shares continue to thrive. Before regular trading on Wednesday, Tesla’s shares rose, indicating a strong level of investor confidence in the company’s prospects and performance.
Despite Tesla’s impressive growth, with its global workforce doubling since 2020 to over 140,000 employees by the end of last year, the company appears to be seeking ways to manage its costs effectively. This growth has been driven by the success of models like the Model 3 and Model Y, with further expansion anticipated from the release of a more affordable car slated for next year. In pursuit of its vision for innovative electric vehicles and other projects, Tesla has invested over $10 billion this year alone.
However, even amid revenue growth and an expanding workforce, Tesla is exploring avenues to streamline its expenses. Reports suggest that the company’s cost-cutting measures may be linked to its plans to ramp up research and development spending.
As of now, Tesla has not officially confirmed any layoffs, although the company’s CFO, Vaibhav Taneja, emphasized the need for cost efficiency in a recent earnings call. It remains uncertain whether Tesla will implement cost-cutting measures and how they might impact employees.
However, the broader tech industry has seen over 32,000 job cuts since the beginning of 2024. Major players like Google, Microsoft, and Meta have announced plans to reduce their workforce as part of restructuring efforts. Over-hiring during the pandemic boom and recent interest rate hikes are cited as key factors driving these targeted, smaller-scale layoffs compared to previous years.
Furthermore, the pursuit of artificial intelligence (AI) is reshaping workforce dynamics, with companies like OpenAI, Microsoft, and Google reallocating resources to prioritize AI talent. While some companies are downsizing their workforce, there is also a surge in hiring for AI-related roles, reflecting the ongoing evolution of the tech industry.
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