by George Hetling
On April 15, Elon Musk announced a 10% reduction in workforce as demand for EVs falls across the industry due to overproduction of electric vehicles, in which the supply now exceeds the market demands. Two executives resigned on the same day.
In the weeks since, this wave of layoffs has rolled out across the company, including thousands of factory workers, service center workers, and office and lab workers. At the Austin gigafactory, over 2,600 workers (12%) were laid off on April 24. This follows Musk’s statement in Tesla’s February earnings call that engineers would be “sleeping on the line” to push out the Cybertruck, which massively underperformed in sales. Tesla employs over 140,000 workers according to its latest annual report, meaning that over 14,000 workers will be out of work at a minimum.
On April 29, two additional executives resigned and their teams were liquidated, with most being laid off and some reorganized to other departments. In the corporate email announcing these two new resignations, Musk says that he wants Tesla to be “absolutely hard core” about job cuts, and that staff members working for executives who “don’t obviously pass the excellent, necessary and trustworthy test” would also be out of a job, leaving room for more job cuts in the coming weeks.
The entire automotive industry is contracting in 2024, with electric vehicles being hit the hardest. Demand for new EVs is now shrinking as new automakers in China and the US’s big three automakers are now competitive in price and quality with Tesla. Tesla’s competitors also face shrinking sales and profit margins. Chinese monopoly BYD has had a similar fall in sales, and automaker Stellantis is also beginning layoffs at US plants, proving concerns across the industry.
Tesla layoffs are evidence of the most recent turn in the deepening economic crisis, the phase in which the capitalists have produced too much and required too many in the workforce, to resist a falling rate in profitability the capitalist carries out mass layoffs and the expense of the working people. The Worker has reported on this trajectory in previous articles.
