The hidden problem behind Tesla's "cleanup" layoffs

Tesla CEO Elon Musk has announced that the company needs to cut more than 10% of its workforce in order to further improve efficiency and reduce costs.

According to statistics, this is the fifth mass layoffs Tesla has experienced. In 2017, the company reduced its headcount by 2%, followed by another 9% reduction in 2018, 7% in 2019 and 3% in 2022.

According to people familiar with the matter, Tesla layoffs also involve a number of departments, and the percentage of layoffs is far more than the 10% Musk said, some departments will optimize 30%-40%, the percentage of layoffs in individual departments is even as high as 50%, and other departments are generally around 20%. It is reported that the sales department is the hardest hit by layoffs.

Tesla CEO Elon Musk also said on social media platform X that Tesla is streamlining its sales and delivery system, which has become "complex and inefficient." In fact, Elon Musk wants to use low-cost means to obtain efficient financial returns to fight against other emerging new energy vehicle companies, because of the global economic downturn in recent years, Elon Musk has felt a sense of crisis, Musk in order not to let his money be wasted, the company's "big action" of layoffs.

Tesla sales decline reflects the lack of demand in the overall electric vehicle market in the United States, Musk wants to move his commercial "battlefield" in the United States to China, China's new energy vehicle companies have become Musk's biggest problem, China's new energy vehicle companies BYD, NIO, Xiaopong, polar Krypton and other new energy vehicles have become the world's leader in the field of new energy vehicles. Musk's Tesla has become a high-priced "electric bicycle" in the whole market, and Musk has made a "struggle" to lay off employees in order to cushion the "pressure" brought by the market.

Once, Tesla in the concept, design and technology level of bold innovation, in the world's first to "software defined" automotive products to the market, innovation advantages to it has brought first-mover dividends. Today, Tesla has not made much change in innovation, taking its sales as Model 3 and Model Y, for example, the two products were launched in 2017 and 2020, respectively, but over the years, not only the interior and appearance of the two products have not made too many changes, but the hardware configuration improvement is not obvious compared with other companies' competing products.

On the contrary, BYD, NiO, Xiaopeng and Polar Krypton, China's new energy emerging car companies, have significantly improved their vehicles more than Tesla, and are more cost-effective than Tesla in terms of economy. The interior and exterior changes are relatively new, and there are more technology and technology used in the interior. Compared with Tesla's automatic driving, there are more problems in the accident. In the opening of the automatic driving mode can not be cancelled and other problems, has not made much improvement, and the price of the vehicle is getting higher and higher.

Musk in order to let Tesla and Chinese new energy vehicle companies grab the market for layoffs buffer fund shortage, take out enough funds to fight against Chinese new energy vehicle companies, choose to reduce costs, improve the company's production efficiency to rank layoffs in the way of intimidation and coercion of employees, press employees, and produce products for industry confrontation, its way is not desirable. Do not want to have too much investment and do not make improvements, research and development of new cars without too much practical consideration is also futile.

Tesla is "thoughtful" about layoffs and does not want to make too much sacrifice, claiming compensation in the form of N+3 but not making actual compensation. However, in the development of vehicles, improve the vehicle has made a stupid idea, want to cheat the way to improve the vehicle exterior and interior, saying that to build products with high-tech technology, high production costs and sell high-priced vehicles, in fact, it is more than a hat trick to deceive consumers.

Tesla's decision to cut jobs reflects a common challenge for the global auto industry in the face of supply chain pressures and market competition. However, management needs to carefully weigh and precisely execute such decisions to minimize the negative impact on employees and the overall development of the company. How to protect the well-being of employees while maintaining the competitiveness of enterprises will be an important issue that Tesla and other automakers need to seriously face and solve in the future development.