Tesla CEO Elon Musk sent an internal email to employees acknowledging that some severance packages given to laid-off workers were incorrectly low and promised to correct the mistake immediately. This comes after the company announced it would be cutting more than 10% of its global workforce, which stood at 140,000 employees at the end of 2023. Details about the layoffs have been scarce, but Musk stated that they were necessary to prepare the company for a new phase of growth.
Recent reports suggest that Tesla is shifting its strategy away from producing a more affordable EV towards focusing on robotaxi development under Musk’s direction. This change in direction was apparent in Musk’s confirmation of the report on removing the previous plan for a more affordable electric vehicle. It remains to be seen whether Tesla will stick with Musk’s 2023 “master plan” that aimed to create a sustainable global energy economy through electrification and sustainable electricity generation.
Tesla reported an 8.5% year-over-year decline in first-quarter deliveries, the first drop since 2020 when operations were impacted by the global pandemic. The company is set to discuss first-quarter results with shareholders on April 23, shedding more light on the restructuring and the departments most affected by the recent layoffs. In a proxy filing, Tesla sought approval from shareholders for a CEO pay package for Musk that mirrors the record compensation plan granted to him in 2018 but was subsequently voided by a court ruling.
Musk’s earlier CEO pay package, valued at $56 billion, was nullified due to concerns about his control over Tesla as CEO and the lack of independence in the board’s compensation committee. Tesla shares have declined significantly this year, dropping approximately 37% as of the latest trading day. This comes amid a challenging period for Musk and Tesla, with uncertainty surrounding the company’s strategy and financial performance. The upcoming shareholder meeting will provide further insights into Musk’s compensation and the company’s future direction.
Overall, the internal email from Elon Musk regarding low severance packages, the layoffs, and the shift in Tesla’s strategy suggest a period of transition and potential transformation for the company. As Tesla navigates these changes, shareholders, employees, and industry observers will be closely monitoring the company’s performance and strategic decisions in the coming months. The upcoming shareholder meeting will be a crucial event for understanding Musk’s compensation, the impact of layoffs, and the future trajectory of Tesla under his leadership.
