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Tesla to lay off nearly 2,700 employees in Texas factory, notice shows
Ahead of earnings report, Tesla announces it will lay off nearly 2,700 employees in Texas factory, notice shows
Tesla will lay off 2,688 employees at its Texas factory, the electric vehicle maker said in a Worker Adjustment and Retraining Notification (WARN) notice said on Monday.
The WARN Act of 1988 is a U.S. labor law that requires companies with 100 or more employees to notify 60 days ahead of planned closings or mass layoffs.
The Austin-based company made headlines earlier this month when reports surfaced of layoffs affecting over 10% of its global workforce, as reported by KXAN.
According to a Worker Adjustment and Retraining Notification letter submitted to the Texas Workforce Commission, Tesla is terminating a staggering 2,688 employees from its Austin location.
Tesla CEO Elon Musk outlined the company's rationale for the layoffs in a memo distributed to employees. Musk emphasized the need for cost reductions and enhanced productivity as Tesla gears up for its next phase of growth, as reported by The New York Times and CNBC.
Despite attempts to obtain further comment from Tesla by KXAN, no response has been received yet.
In interviews with KXAN, former Tesla employees expressed shock and dismay at the sudden layoffs. One employee, who requested anonymity, described the experience as "crazy" and "heartbreaking," expressing disbelief at the swift turn of events.
Recalling the morning of April 15, the employee recounted waking up to an email notification titled "Tesla Employment Update," which delivered the devastating news of immediate termination.
The email instructed affected employees that their last working day was to be April 14, 2024, with immediate cessation of work responsibilities and access to Tesla systems and facilities.
Feeling blindsided by the abruptness of the layoffs, the employee lamented, "It was out of nowhere. I wasn't expecting it. I just want to cry."
Meanwhile, shares of Tesla edged higher on Tuesday ahead of the electric car maker's first-quarter results. Analysts are expecting its lowest gross profit margin in more than six years due to price cuts and slowing demand.
The stock was up 2.3% at $145.34 in volatile early trading ahead of the report, due after the closing bell.
CEO Elon Musk is expected to face pointed questions from investors during the post-results conference call about the fate of the so-called Model 2, a low-cost vehicle he had promised in January would be available in 2025.
