The billionaire Elon Musk, who leads Tesla, the US car manufacturer, is reportedly cutting over 10% of its global workforce due to declining sales.
According to the report, the company is grappling with a decrease in demand for electric vehicles (EVs) and a price war with Chinese competitors.
Musk informed his staff that the reduction of more than a tenth of the workforce is a necessary step.
He stated: ‘We have done a thorough review of the organization and made the difficult decision to reduce our headcount by more than 10 percent globally.'
‘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 added.
As a report, Tesla, which employs an estimated 140,000 people worldwide, is set to lay off as many as 14,000 employees.
This includes potentially hundreds of roles in the UK, where Tesla employs around 1,000 people according to recent filings.
Tesla's Cybertruck, a futuristic pickup model, has attracted a relatively narrow group of buyers due to its high price and unique design.
This is a vehicle made of stainless steel, with better corrosion resistance than regular steel but much harder to manufacture.
This truck arrived more than two years behind schedule and has consumed resources that could have been used for more widely appealing products.
Tesla has adjusted prices multiple times to meet demand, lowering prices to boost sales and then sometimes raising them again.
Analysts believe this strategy has eroded the company's profits without significantly boosting revenue.
Lowering prices has also sharply reduced the resale value of Tesla vehicles, as no one pays more for a used car than for a new one.
This is seen as the world's largest car market, where more than one-third of new car sales are electric vehicles.
BYD surpassed Tesla in global electric car sales in the last three months of 2023 with many sedan models.
These include versatile sports cars and small, affordable cars. The company's Seagull model is sold for less than $12,000 in China.
Even after Tesla lowered prices, the sedan Model 3 and SUV Model Y produced at the Shanghai factory are still much more expensive than many Chinese models.
Earlier this month, the company reported its first drop in car sales in four years, delivering 386,810 vehicles in the three months leading up to the end of March.
Then Despite this decline, Tesla managed to reclaim its title as the world's top seller of electric cars, following a slump in sales at Chinese rival BYD.
However, the total was down by more than a fifth from the previous quarter and around 9% less than in the same period of 2023.
After years of rapid sales growth that helped establish Tesla as the world's most valuable car maker.
However, the company is preparing for a slowdown in 2024.
