CEO Elon Musk said Tesla is laying off thousands of employees in an attempt to simultaneously cut costs and increase productivity.

Musk said in an email that the electric car maker is laying off “more than 10%” of its global workforce, Electrek and Bloomberg News reported. Tesla has more than 140,000 employees as of 2023, meaning layoffs could affect more than 14,000 people.

The layoffs come two weeks after Tesla announced its first year-over-year sales decline in years amid a broad cooling in electric vehicle sales. The company warned investors that sales growth in 2024 could be “significantly lower” than its stated target of 50% annual growth. It’s also the first time in a long time that it’s in between product cycles, with the pricey Cybertruck only recently entering production and the popular Model Y entering its fourth year without any major updates.

“As we prepare the company for its next phase of growth, it is extremely important to look at all aspects of the company to reduce costs and increase productivity,” Musk said in an email. He said Tesla’s growth has resulted in ” Duplication of roles and job functions in certain areas.”

“As part of this effort, we conducted a thorough review of the organization and made the difficult decision to reduce our global headcount by more than 10%. There is nothing I hate more, but it has to be done. .This will allow us to lean, innovate, and aspire to the next phase of growth,” Musk wrote.

Tesla sold a record 1.8 million electric vehicles in 2023. But the company spent much of the year slashing prices on its most popular models in response to high interest rates and increasing global competition. Tesla has reportedly abandoned — or at least delayed — plans to build a low-cost electric car with a starting price of around $25,000, instead opting to use an underlying platform it was developing to power so-called robotaxis. SK said the robot will debut on August 8th.

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