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Tesla Exec Resigns Amid Massive Layoffs

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Tesla Exec Resigns Amid Massive Layoffs

Tesla Exec Resigns Amid Massive Layoffs

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Layoffs have become a common discussion in America as many businesses struggle to adjust to the current market conditions and maintain sustainability. This has led to massive layoffs at top companies and even the smaller scale chains. 

 

Tesla is one of the companies that has used dismissals to restructure the company, affecting the workers’ morale. Many top-level executives have even resigned over the past couple of weeks. The latest is the head of product launches, Rich Otto, who reportedly resigned last week. Everything happening has thrown Tesla “out of balance” and shaken customers’ trust in them.

What Otto Said About Tesla

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After Otto turned in his resignation, he shared a message via the company website. Tesla was a company he woke up every morning to commute to and give his best, knowing the products they manufactured were improving life. He admitted he would miss the company in his message and confessed that while it gave him a lot, it has also taken its “pound of flesh.” He also said something cryptic about how a company is only as great as its people, leading many to believe he may be unhappy about the layoffs. 

A Time for Change

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Otto also discussed the layoffs in his statement. He said they have shaken the company, affecting its morale and disrupting the balance. He claimed it had become difficult to see the long game, and it was time for him to try something different. He plans to get some rest before moving on to his next project. 

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Other Executives That Left

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Otto is only the latest senior-level executive to leave Tesla; others like him have been going in trickles over the last few weeks. The tech company has lost six other management staff, including the senior Human Resources director and the senior director of Supercharging, and it all seems to be because of the layoffs. 

The same day Tesla announced the first round of dismissals, two of its executives, Drew Baglino, SVP of powertrain and electrical engineering, and Rohan Patel, VP of public policy and business development, immediately sent out their resignation letters and announced their exit via X, formerly Twitter.

 

Why Did They Really Leave?

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Baglino had been an employee at Tesla for almost two decades, and his love for the company was evident in his farewell post. He wished Tesla and those who remained aboard all the best and confessed he would always have a soft spot for them. On the other hand, Patel blamed his decision to leave the company for the significant “overall changes” happening. He admitted he enjoyed his time at Tesla even though he seemed to imply that it was because of the team he was working with.

Why Is Tesla Downsizing Its Workforce?

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Layoffs at Tesla started with a vengeance on April 15 when the CEO, Elon Musk, revealed plans to dismiss over 10% of its employees. The roles that were cut were mostly duplicate roles enabled by Tesla’s massive growth, and according to Musk, the layoffs are a way to stay effective and profitable as the company prepares to grow even more. 

It Was Swift and Merciless

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Musk announced Tesla’s plans to its workforce with an internal memo, followed by a few hours of respite before the layoffs started. Those affected received the dreaded notification. Unfortunately, because of the rapid timeline, some workers only learned about their dismissal after entering the facility with their badges. 

In subsequent weeks, many workers across various departments got the notification, and the executives were tasked with the headcount, a task Musk said they had to be strict with. 

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More Layoffs in May

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Tesla continued to send out layoff notices after April ended. By May, it had entered the fourth week of layoff notices. The continuous dismissals left those left behind in a state of anxiety, wondering if they would ever survive the tumultuous period. Those who can’t stand the anxiety have been getting ready to walk away voluntarily. Others just want an email announcing the layoffs are over so they can move on and stop worrying. 

People Are Not As Excited About EVs

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Another issue that may be forcing Tesla to downsize is low demand, which means fewer deliveries of its electric cars. The company delivered less than 400,000 cars in Q1, far less than it produced for the quarter, leading to a drop in its shares. 

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Tesla’s Competitors Had It Worse

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Tesla is seemingly in choppy waters right now, but the truth is that other EV car companies have not had it any better. One of Tesla’s competitors, Fisker, was under threat of bankruptcy.

Tesla’s Employees in China Also Felt the Layoffs

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Most of the layoffs affected employees in the United States, but there have also been dismissals in its Chinese branch. The first round occurred in mid-April as part of a plan to lower the global headcount, and more dismissal letters were sent out in the second week of May. Many hope all the layoffs will be worth it and the tech giant can get back on the mend.

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