The electric vehicle maker will chop 2,753 jobs in the Bay Area, according to official WARN notices the company sent to the state Employment Development Department that were provided to this news organization.
The Fremont vehicle plant complex is included in the job cuts. An estimated 1,452 of the layoffs are slated to occur at an address that corresponds to the site of the Fremont vehicle factory, one of the WARN letters shows.
Layoffs are also planned at multiple other locations in Fremont and Palo Alto, the filings with the EDD show.
The job cuts come at a time when Tesla is mired in a slump that has affected electric vehicle makers worldwide.
"The electric vehicle adoption rate globally is under pressure," Elon Musk, Tesla's chief executive officer, said during an earnings call with Wall Street analysts regarding Tesla's first-quarter financial results. "A lot of other auto manufacturers are pulling back on electric vehicles and pursuing plug-in hybrids instead."
Here is where Tesla has decided to chop jobs in the Bay Area:
- Fremont, 2,267 layoffs. These include staffing reductions at Tesla facilities on Fremont Boulevard, Kato Road, Warm Springs Road and Page Avenue.
- Palo Alto, 486 job cuts. These include layoffs at Tesla sites on Page Mill Road, Hanover Street, El Camino Real and at Stanford Shopping Center.
All told, Tesla has reported plans to jettison more than 3,000 Bay Area jobs — specifically, 3,051 positions — during 2022, 2023 and so far in 2024. In 2022, the electric vehicle maker disclosed a decision to cut 298 positions in San Mateo and Fremont.
The approximately 2,700 layoffs by Tesla represent the largest single round of job cuts by a tech company since the tech sector began its current series of staffing reductions in 2022.
In December 2022, Facebook app owner Meta Platforms revealed plans to chop 2,564 jobs in the Bay Area, primarily in Menlo Park.
In January 2023, Google disclosed that it had decided to slash 1,629 jobs in the Bay Area, mainly in Mountain View.
None of the layoffs affected unionized workers, according to the WARN notices. The job cuts were all described by Tesla as permanent.
In addition, Tesla is cutting jobs at other locations in California. These include:
- Lathrop (San Joaquin County), 515 job cuts.
- Burbank (Los Angeles County), 64 layoffs.
Tesla is cutting 3,281 job cuts in California, including the Bay Area layoffs.
The staffing reductions were all scheduled to occur over a two-week period that begins on June 14, according to the WARN letters.
"None of the employees are represented by a union and none of the employees have bumping rights," Rissa Royal, Tesla's manager of people operations, wrote in the WARN letters to the state EDD.
During the conference call, Tesla executives at one point described the company as a tree and at another point as an evolving organism, adding that the time had simply arrived for Tesla to conduct job cuts.
"We're basically going through that exercise wherein we're like, hey, how do we set this company right for the next phase of growth," Vaibhav Taneja, Tesla's chief financial officer, told the analysts during the conference call. "The way to think about it is any tree, which grows. It needs pruning. This is the pruning exercise that we went through."
Musk also chimed in on the call on the top of the staffing reductions, saying that it simply was time for Tesla to trim its staffing levels and refocus.
"It is time to reorganize the company for the next phase of growth and you really need to reorganize it, just like a human when we start off with one cell and kind of zygote, kind of blastocyst and you start growing arms and legs and briefly, you have a tail," Musk said.
Piper Sandler analyst Alex Potter interjected, "But you shed the tail."
"You shed the tail, hopefully," Musk responded. "A company is kind of like a creature growing. And if you don't reorganize it for different phases of growth, it will fail. You can't have the same organizational structure if you're 10 cells versus 100 versus 1 million versus 1 billion versus 1 trillion."
To be sure, Tesla's first-quarter earnings results dismayed analysts.
The electric vehicle maker cheered investors, however, by disclosing its plans for a low-cost vehicle.
"Clearly Tesla is going through a challenging period of delivery growth and this story will not turnaround overnight so patience is required," Daniel Ives, an analyst with Wedbush, wrote in a research note for investors in the wake of the earnings call.
But the Wedbush analysis also stated that Musk is paying much closer attention to Tesla's fortunes.
"It now feels that Musk is taking tighter control of the reins of Tesla with a lower-cost vehicle on the roadmap," the Wedbush analysts wrote in the research note.
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