Tesla’s sweeping layoffs are reportedly escalating at the electric vehicle maker’s plant in Shanghai.
Bloomberg News, citing people familiar with the matter, reports that Tesla’s initial round of layoffs in April more directly affected sales representatives in China. However, additional layoffs that began earlier this week have affected Tesla’s engineers, production line workers, customer service representatives, and the logistics team.
Gigafactory Shanghai is home to more than half of Tesla’s global production, assembling the Model Y and 3 EVs. In September, the factory produced its 2 millionth EV, just 13 months after it made its 1 millionth and almost four years after production started.
The extension of layoffs in the world’s largest auto market comes as Tesla is looking to boost its profile as local rivals rapidly develop new technology and sell their cars for cheap. In recent weeks, Tesla has slashed prices on its cars around the world, including China. The Austin, Texas-based company sold 62,167 China-made cars last month, down 18% compared to the same time in 2023.
Read more: Tesla quietly axed thousands of open jobs, pointing to a hiring freeze after Elon Musk’s layoffs
Tesla CEO Elon Musk’s surprise trip to Beijing last month helped the company move closer to a full launch of its Full Self-Driving driver assistance technology.
And, as Musk pushes out executive leaders, lays off workers, and takes more control of North American operations, Senior Vice President of Automotive Tom Zhu is heading back to his role overseeing the Chinese market, Electrek reports.
Zhu has been credited with turning Giga Shanghai into a major performer for the automaker. He’s also been referred to internally as the “fireman” because of his ability to hit high targets and solve issues, according to The Wall Street Journal. Zhu is one of just three senior executives named on Tesla’s website after Drew Baglino, a Tesla veteran who oversaw powertrain, resigned last month.
Most of the laid off employees in China will receive three months salary and a payout equivalent to one month’s pay for every year worked, Bloomberg reports. Some of the workers laid off in the U.S. in recent weeks have been offered two months of severance pay, Business Insider reported.
“With [Tesla’s] rapid growth there has been duplication of roles and job functions in certain areas,” Musk wrote to employees last month as he informed them of job cuts. “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.”
Tesla’s layoffs have affected at least 14,000 people, including the entirety of the company’s marketing division and most of its public policy and Supercharger teams. Summer internship offers have been revoked just weeks before their start dates.
Tesla also appears to have issued a pause on hiring in China; both Tesla’s career page on its website and LinkedIn are vacant of jobs located in the Asia-Pacific region. Positions in China were still being advertised as of Wednesday. More than 3,000 job postings in North America have been taken down, although Tesla appears to still be hiring for positions in Germany, the Netherlands, and the Dominican Republic.