Mass layoff: Tesla Devastates Austin Texas in latest round of layoffs

Photo byDaniel Oberhaus

Tesla Inc. has officially notified the Texas Workforce Commission of a major workforce reduction, marking one of the largest layoffs in the state in recent years. According to the Worker Adjustment and Retraining Notification (WARN) Act notice filed on April 22, the electric vehicle giant is set to lay off approximately 2,700 employees at its gigafactory in eastern Travis County, Texas. This action affects about 12% of the workforce at the facility, significantly impacting Tesla’s operations in the Austin area.

The layoffs were first hinted at by CEO Elon Musk last week when he announced a global reduction of more than 10% of Tesla’s workforce, which numbers over 140,000. The local job cuts were specified in the WARN notice as part of this broader initiative to streamline operations and eliminate role duplications within the rapidly growing company.

Tesla's decision comes amid a challenging period for the electric vehicle market, with the company experiencing a decline in vehicle deliveries for the first time in nearly four years. In a companywide email, Musk cited the need for cost reductions and increased productivity as essential for preparing Tesla for its next growth phase. Despite the scale of the layoffs, Tesla aims to maintain its commitment to innovation and efficiency.

The Austin-area gigafactory, which began operations in 2022, has been a central piece in Tesla’s expansion strategy. The facility, which produces Model Y SUVs and Cybertrucks, has grown rapidly. At the end of last year, the factory employed 22,777 workers, up from 12,277 at the end of 2022.

The WARN notice issued by Tesla is required by federal law to provide 60 days' notice to local governments and workers ahead of significant layoffs. This legal step ensures that employees and regional authorities are adequately prepared for the impending job cuts.

The economic impact of these layoffs is significant, not only for the employees affected but also for the local economy in Travis County. Prior to these cuts, Tesla was competing with H-E-B LP to become the top private employer in the region. Despite the layoffs, Tesla remains a major player in the local economy and continues to be the largest tech employer in the area.