In the midst of Tesla Inc.’s most extensive round of job cuts, two of the company’s top executives have announced their departure, signalling a period of transition for the electric vehicle (EV) manufacturer grappling with slowing demand in the EV market.
The global headcount reduction, exceeding 10%, could potentially climb closer to 20% in certain divisions, as reported by individuals familiar with the matter.
Senior Vice President Drew Baglino, responsible for engineering and technology development for Tesla’s batteries, motors, and energy products, confirmed his resignation from the company. Baglino, an 18-year veteran at Tesla, played a pivotal role in the company’s executive leadership and strategic initiatives, including co-hosting earnings calls and appearing alongside CEO Elon Musk at various events.
Joining Baglino in departure is Rohan Patel, the carmaker’s Vice President of Public Policy and Business Development. Patel’s exit was also confirmed via social media, prompting Musk to express gratitude for their contributions.
The news of the executive departures weighed on Tesla’s shares, which dropped more than 3% on Monday. This decline adds to the stock’s year-to-date fall of 33%.
Musk’s decision to implement the job cuts, potentially affecting over 14,000 employees globally, comes amidst concerns over the deteriorating outlook for EV sales. In an internal memo seen by Bloomberg News, Musk cited the need to streamline operations and reduce costs in preparation for the company’s next phase of growth.
However, the aggressive cost-cutting measures have raised questions about the impact on Tesla’s organizational structure and leadership succession. Musk’s multiple roles across various companies, coupled with the departure of key executives like Baglino and former CFO Zachary Kirkhorn, have sparked speculation among investors about Tesla’s long-term strategic direction.
The departure of top executives corresponds with broader challenges facing Tesla, including recent disappointing vehicle delivery figures and concerns about slow production of new models like the Cybertruck.