Two top Tesla executives depart as the company lays off 10% of global employees

Tesla (TSLA) faces a leadership loss as two top executives left the company yesterday. This has happened amid news that the electric automaker is laying off 10% of its global workforce.

Tesla’s SVP of Powertrain and Energy Engineering Drew Baglino announced on X (Twitter) yesterday that he is leaving the company. For the last few years, Drew has been Elon Musk’s top guy in battery technology.

Drew Baglino left Tesla after an 18-year-long career at Tesla. He joined the company as an Electrical/Firmware in March 2006. It was a time when Tesla was just a small company and the 1st-generation Roadster was in its development phase. He helped build multiple components and firmware of the original Roadster during his first role at Tesla. He described his early achievements at Tesla on his LinkedIn profile as:

Part of a small group who completely re-architected the control electronics and firmware of the Roadster power electronics module. Led firmware development for motor, traction, and driveline control for the Roadster.

“I made the difficult decision to move on from Tesla after 18 years yesterday,” Drew Baglino posted on X (Twitter). “I am so thankful to have worked with and learned from the countless incredibly talented people at Tesla over the years,” he added.

After Drew, Tesla’s Vice President, Public Policy and Business Development Rohan Patel also posted his leaving note on X (Twitter). “The past 8 years at Tesla have been filled with every emotion – but the feeling I have today is utmost gratitude,” Rohan wrote in his post.

“Thanks for everything you’ve done for Tesla. Much appreciated,” Elon Musk replied to Rohan’s post on X.

Tesla has lost two of its top performers in two different areas of the company. Drew Baglino was a powerhouse in its engineering and battery technology development and Rohan Patel was doing great on the business development side.

Rohan Patel joined Tesla in January 2017. This was a very difficult period at Tesa as the automaker was struggling with ramping up production of its newly-launched Tesla Model 3 midsize electric sedan. The years 2017 and 2018 are known at Tesla as “Production Hell“.

Rohan and Drew were both at Tesla during the Production Hell era and helped the company recover from it when the majority of Wall Street analysts were predicting the company’s doom soon.

10% Layoffs at Tesla

Tesla CEO Elon Musk sent the following email to all Tesla employees globally. A screenshot of which leaked on X through the Chinese social media.

Elon Musk’s email specifically mentions that the company is laying off 10% of its global workforce. According to Musk, the primary reason for these layoffs is “cost reductions and increasing productivity”.

Laying off 10% of the Tesla workforce equates to around 14,000 employees out of 140,473 total. Musk wrote to employees:

Over the years, we have grown rapidly with multiple factories scaling around the globe. With this rapid growth there has been duplication of roles and job functions in certain areas. As we prepare the company for our next phase of growth, it is extremely important to look at every aspect of the company for cost reductions and increasing productivity. 

As part of this effort, we have done a thorough review of the organization and made the difficult decision to reduce our headcount by more than 10% globally. There is nothing I hate more, but it must be done. This will enable us to be lean, innovative and hungry for the next growth phase cycle.

I would like to thank everyone who is departing Tesla for their hard work over the years. I’m deeply grateful for your many contributions to our mission and we wish you well in your future opportunities. It is very difficult to say goodbye.

For those remaining, I would like to thank you in advance for the difficult job that remains ahead. We are developing some of the most revolutionary technologies in auto, energy and artificial intelligence. As we prepare the company for the next phase of growth, your resolve will make a huge difference in getting us there.

Thanks,
Elon

This was a general email sent to the entire company yesterday. The next emails were to be sent to employees who were laid off. One of such employees at the company’s Fremont factory shared the following screenshot on Reddit.

Above: Screenshot of Tesla’s official email to employees who were fired after Elon Musk’s announcement of laying off 10% workforce around the globe. Credit: Unknown ex-Tesla employee on Reddit, u/AnAsian2incher.

The Tesla employee who posted the above email screenshot shared his experience on Reddit after getting the emails. According to him, at least 2 associates from every department and 1 supervisor from each shop at the Fremont factory were laid off.

I work at the Fremont Factory, and we got this email around 11:40 PM. Workers that got two emails instead of one, when it got sent, had got laid off. 2 Associate Per Department (From what we experienced) 1 Supervisor from all shops. We are all shocked, nervous, and scared; hoping we didn’t get a second email. No one saw it coming, you knew because you didn’t have access to the Tesla Systems, and you couldn’t badge in through security.

Laid-off employees will be offered severance packages and benefits the same way it happened at Twitter in 2022. Elon Musk had already predicted earlier this year that 2024 will be a slow year for Tesla in terms of growth.

Tesla’s vehicle delivery numbers dropped by 20% QoQ in Q1 2024. However, this is not the case with Tesla alone, the US EV-maker’s archrival BYD from China lost 40% of its sales in the 1st quarter of 2024. With the rest of the year ahead, Tesla is adjusting itself for the next phase of growth. This also means that employees who haven’t been laid off will have to perform even better to meet Elon Musk’s work performance standards.

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Featured image: Courtesy of Tesla, Inc. (Battery Day 2020).

Note: An earlier version of this article was published at Tesla Oracle. Author: Iqtidar Ali.