FREMONT, California – Electric car manufacturer Tesla announced plans to reduce its workforce by more than 10% as part of a strategic restructuring to support future growth. The company, led by CEO Elon Musk, aims to streamline operations and focus on key areas like robotaxi development. The decision comes amid a shift in Tesla’s strategy away from producing a more affordable electric vehicle, as reported by Reuters earlier this month.
This move follows a recent decline in first-quarter deliveries, marking the first drop since 2020 due to disruptions caused by the global pandemic. As Tesla prepares to discuss its first-quarter results with shareholders on April 23, executives are expected to shed more light on the restructuring efforts and how different departments within the company will be affected.
In a proxy filing released on Wednesday, Tesla sought approval from shareholders for a new CEO pay package for Musk after a previous $56 billion compensation plan was voided by the Delaware chancery court. The court ruled that Musk, as CEO, held significant control over Tesla, raising concerns about the independence of the board’s compensation committee.
Despite these internal challenges, Tesla’s shares have seen a significant decline this year, dropping approximately 37% as of Wednesday. The company’s stock closed at $155.45, reflecting investor concerns about the company’s future performance and strategic direction. The upcoming shareholder meeting on CEO compensation will be a key event for Tesla’s stakeholders and observers following the company’s trajectory in the competitive electric vehicle market.
As Tesla navigates these changes, questions remain about its adherence to Musk’s ambitious “master plan” for a sustainable global energy economy through electrification and renewable energy solutions. The workforce reduction is seen as a necessary step to position the company for sustainable growth and innovation in the rapidly evolving automotive industry. With investors and industry experts closely monitoring Tesla’s next moves, the company faces a pivotal moment in its journey towards long-term success and market leadership.