Shares of Tesla Inc. dropped 5% today after the automaker announced plans to let go more than a tenth of its workforce.

The company had 140,473 employees last December, which suggests over 14,000 staffers may be leaving the company. Tesla didn’t disclose what business units are affected. However, it did divulge that the departing staffers include at least two senior executives.

The workforce reduction was first reported this morning by auto industry publication Electrek, which obtained an internal memo detailing the layoffs. “Over the years, we have grown rapidly with multiple factories scaling around the globe,” Tesla Chief Executive Officer Elon Musk wrote in the memo. “With this rapid growth there has been duplication of roles and job functions in certain areas.”

Musk later confirmed the job cuts on X without commenting on the number of affected employees. Separately, Tesla executives Drew Bagliano and Rohan Patel announced that they’re leaving the company. Bagliano was most recently the automaker’s senior vice president of powertrain and energy engineering, while Patel was the senior global director of public policy and business development.

“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,” Musk wrote in the memo to employees. “This will enable us to be lean, innovative and hungry for the next growth phase cycle.”

The layoffs come two weeks after Tesla disclosed its first decline in vehicle shipments since 2020. The company shipped 386,810 electric cars to customers during the first quarter, 8.5% less than 12 months earlier. New vehicle production, another measure of demand, also declined.

Until recently, Tesla’s efforts to drive long-term revenue growth reportedly centered on plans to launch an affordable electric car. Musk has indicated Tesla is targeting a $25,000 sale price for the vehicle. Recent rumors suggest the car would have been a crossover and was set to enter production in late 2025.

Earlier this month, Reuters reported that Tesla had scrapped the project. The company is believed to be refocusing its growth strategy on an internal effort to develop an autonomous taxi. Little is known about the vehicle except that it will be based on a newer chassis design than the one that underpins Tesla’s current cars.

The company already provides a partly autonomous driving system, Full Self-Driving, with its vehicles. The software can help drivers park, switch lanes and slow ahead of stop signs and traffic lights. An upcoming update is set to add a feature that will allow the system to navigate city streets automatically.

Photo: Tesla