Tesla will lay off more than 10 per cent of its global workforce, an internal memo seen by Reuters on Monday shows, as it grapples with falling sales and an intensifying price war for electric vehicles.

The world’s largest automaker by market value had 140,473 employees globally as of December 2023, its latest annual report shows. The memo did not say how many jobs would be affected.

Some staff in California and Texas have already been notified of layoffs, a source familiar with the matter told Reuters, declining to be named due to the sensitivity of the subject.

“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 CEO Elon Musk said in the memo.

“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 per cent globally,” it said.

Tesla did not immediately respond to a request for comment.

Stock has fallen about 31 per cent so far this year

Its shares were down 1.3 per cent in premarket trading.

The stock has fallen about 31 per cent so far this year, underperforming legacy automakers such as Toyota Motor and General Motors, whose shares have rallied 45 per cent and 20 per cent respectively thanks to a slow consumer transition away from traditional internal combustion engine vehicles.

Energy giant BP has also cut over a tenth of the workforce in its EV charging business after a bet on rapid growth in commercial EV fleets didn’t pay off, Reuters reported on Monday, underscoring the broader impact of slowing EV demand.

“Tesla is maturing as a company and isn’t the growth story that it used to be,” said Craig Irwin, senior research analyst at Roth Capital.

“Layoffs imply management expects weak demand to persist.”

Layoffs could be a cost trim ahead of new models

Still, Pedro Pacheco, vice-president of research and automotive at Gartner, said the cuts could simply be a sign of the company trimming costs ahead of releasing new models, as sales slow down from the strong growth propelled by the launch of the Model Y and Model 3.

Tesla reported this month that its global vehicle deliveries in the first quarter fell for the first time in nearly four years, as price cuts failed to stir demand.

The EV maker has been slow to refresh its aging models as high interest rates have sapped consumer appetite for big-ticket items, while rivals in China, the world’s largest auto market, are rolling out cheaper models.

Reuters reported this month that Tesla had cancelled a long-promised inexpensive car that investors have been counting on to drive mass market growth. Musk denied the report, but did not identify any specific inaccuracies.

The company is looking to shore up its margins, which have been dented by repeated price cuts, especially in China where it faces stiff competition from local rivals including market leader BYD, which briefly overtook the U.S. company as the world’s largest EV maker in the fourth quarter, and new entrant Xiaomi.

Tesla recorded a gross profit margin of 17.6 per cent in the fourth quarter, the lowest in more than four years.

Tesla had previously laid off four per cent of its workforce in New York in February last year as part of a performance review cycle and before a union campaign was to be launched by its employees.

Tech publication Electrek first reported the latest job cuts.

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Ontario will introduce more than 300 new weekly GO Transit trips by the end of the month, something Metrolinx describes as “the single biggest enhancement of GO rail service since 2013.”

The changes will include 15-minute weekend service frequency on parts of the Lakeshore West and Lakeshore East lines.

It will also mean additional trains on the Kitchener, Stouffville, and Milton lines starting April 28.

Premier Doug Ford made the announcement in Milton, Ont. alongside Transportation Minister Prabmeet Sarkaria.

“This means more options and greater convenience on Milton, Lakeshore West, Lakeshore East, Kitchener, Stouffville and the UP Express Lane lines,” the premier told reporters.

“Today’s announcement represents a 15 per cent increase in GO service.”

Here’s what is changing:

• Lakeshore West: Service will increase to 15-minute frequency on weekend afternoons and evenings between Oakville GO and Union Station
• Lakeshore East: Service will increase to 15-minute frequency on weekend afternoons and evenings between Durham College Oshawa GO and Union Station.
• Kitchener: There will be 30-minute weekday service in the midday and evenings between Bramalea GO and Union Station. Some weekend trips will be increased to 10 cars.
• Stouffville: Evening train service seven days a week
• Milton: One additional morning rush hour trip to and from Milton to Union Station
• UP Express: Every second train (every 30 minutes) will be non-stop between Union Station and Pearson International Airport seven days a week.

The government also said that some trips along Lakeshore West, Lakeshore East, Milton, Kitchener, Barrie and Stouffville will be adjusted to depart up to nine minutes earlier or later to “better align with actual travel times, and new and connecting services.”

In a statement, CEO of Metrolinx Phil Verster called the additional trips “the single biggest enhancement of GO rail service since 2013,” adding that it will bring the total number of weekly rail trips to 2,307.

“This will give our customers more flexibility and makes it easier to choose transit first,” he said.

Announcement unrelated to Milton by-election, premier says

Ford said the timing of Monday’s announcement was unrelated to a by-election taking place in Milton on May 2, despite a suggestion from the Ontario Liberal Party.

The Liberal candidate for the riding said in a statement that all-way, all-day GO train service for Milton was something that both he and Leader Bonnie Crombie has fought for.

“Don’t be surprised by today’s abrupt change of heart, Doug is only doing it for himself,” Galen Naidoo Harris, Ontario Liberal candidate for Milton, said.

“This riding has had a Conservative MPP since 2018 and it’s only now, when this seat is at risk, that Doug Ford has managed to find Milton on the map.”

Ford said that his government is making announcements “every single day in every region of this province.”

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