(MENAFN) On Monday, reports indicated that Tesla, a multinational electric vehicle manufacturer headquartered in the United States, plans to reduce its global workforce by over 10 percent.
"As we prepare the company for our next phase of growth, it is extremely important to look at every aspect of the company for cost reductions and increasing productivity," multiple news agencies quoted chief executive Elon Musk as saying in an internal memo to workers.
"There is nothing I hate more, but it must be done. This will enable us to be lean, innovative and hungry for the next growth phase cycle," he further mentioned.
As of December 2023, Tesla employed over 140,000 individuals globally.
The decision to lay off employees coincided with intensified competition in China's electric vehicle market, where Tesla faced increasing pressure.
Chinese automaker BYD outpaced Tesla for the second consecutive year, producing over three million vehicles in 2023, including hybrids and battery-electric models, compared to Tesla's 1.84 million fully electric vehicles.
Many of BYD's vehicles are priced lower than Tesla's offerings. Additionally, Xiaomi, a China-based smartphone manufacturer, recently announced plans to sell its electric vehicle SU7 at a lower price point than Tesla's offerings in China.
Tesla's stock price experienced a 3 percent decline at 10:34 a.m. EDT (1434 GMT) on the Nasdaq exchange.
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