May 7th, insiders have revealed that Tesla has initiated a new round of layoffs, which include more departments such as software, service, and engineering.

Previously, Tesla CEO Elon Musk sent an email to employees stating that the company would cut more than 10% of its global workforce to reduce costs and improve production efficiency. Currently, public information shows that Tesla stated in a document released in January that it has over 140,000 employees worldwide, which means that this round of layoffs will affect 14,000 people.

At that time, Tesla's layoffs were mainly focused on the sales team, while this time it involves more departments related to both hardware and software, affecting a broader range.

Tesla's large-scale layoffs are related to the recent downturn in the company's production and sales data. Data shows that in the first quarter of 2024, Tesla delivered a total of 386,810 vehicles, a year-on-year drop of 8.5%. Analysts' average expectation for Tesla's delivery volume was about 457,000, with forecasts ranging from 414,000 to 511,000 vehicles, and the actual sales volume did not even meet the lowest standard, surprising the market.

What is more concerning is that Tesla's highly anticipated Cybertruck is not selling well in North America. To address the issue of overcapacity, Tesla has announced a reduction in the production shifts for the Cybertruck. However, analysts say that if Tesla is determined not to manufacture affordable sedan models, then at least until 2026, Tesla will not have any new models to launch.

On April 29, the layoffs at Tesla affected the executive team. It was reported that the head of Tesla's Supercharger team, Rebecca Tinucci, and the head of new products, Daniel Ho, will leave the company along with their entire team of about 500 employees.

Musk once mentioned in an internal letter that Tesla has achieved rapid growth over the years, opening several factories worldwide, but with the expansion of the company's size, some departments have seen duplication of roles and job functions. He pointed out that layoffs are an important measure for the company to respond to current market challenges and optimize its structure, aiming to enhance the company's competitiveness and innovation capabilities. To focus on all aspects of the business for the company's next phase of growth and cost reduction, it is crucial.

Up to now, Wall Street's general expectation for Tesla's earnings per share for 2024 has decreased by 29% since the end of 2023. Data from FactSet shows that looking ahead, Wall Street generally expects Tesla's earnings per share for 2025 to be $3.70, lower than the forecast of $5.29 at the end of 2023.