Tesla Inc. (NASDAQ: TSLA) has announced a 10% workforce reduction in Norway, providing all affected employees with a severance package.
What Happened: The company had to curtail the acceptance period for the severance packages from a week to three days due to high demand, according to TV2 reported on Thursday.
The severance package comprises a minimum of three months of full salary without work obligations, even for those recently hired. Employees with longer tenure could receive up to 15 months' salary without any work obligations.
This move is part of Tesla's broader global restructuring strategy, aiming to cut approximately 14,000 positions out of its 140,000-strong workforce. The primary objective of this restructuring is to streamline the organization and gear it up for future expansion. However, this could potentially result in longer wait times at Tesla workshops and a dip in service quality in Norway.
In an email to employees, Tesla CEO Elon Musk emphasized the necessity of the downsizing to streamline the company and prepare it for the next phase of growth.
Why It Matters: Earlier in May, Tesla had initiated a series of layoffs across various divisions, including Supercharger networks and advertising. Following this, the company's Supercharger Chief, Rebecca Tinucci, and her entire team were dismissed after Tinucci refused to lay off more workers than planned.
In April, Tesla faced pressure from investors, including Norwegian pension fund KLP, over collective bargaining concerns amid an ongoing labor dispute in Sweden.
Meanwhile, Danny Moses, a prominent investor and long-time Tesla critic, predicted a significant drop in Tesla's stock price based on the company's recent developments and future prospects.