Rumors have been swirling for some time that Tesla’s China sales had dropped off after a strong start, and that some kind of a restructuring was imminent. The electric vehicle maker’s management made it official an Monday, announcing the company had been laying off employees since the beginning of the year in an effort to improve sales.
California-based Tesla, helmed by the charismatic billionaire Elon Musk, began to sell cars in the world’s largest auto market around eight months ago. The high end EV manufacturer currently has nine stores and service centers in China, and has signed contracts with China Unicom and Soho China Ltd. and other firms to build a number of charging stations throughout the country.
More on Tesla layoffs
According to Gary Tao, the spokesperson for Tesla in China, the firm will eliminate some positions as it makes structural changes to its business in China. He was interviewed by telephone on Monday. Tao said he did not have any additional information on how many jobs will be involved in the lay offs. A few days ago, the Chinese newspaper Economic Observer reported that Tesla was in the process of cutting 180 of the 600 positions in China due to weak sales.
The ongoing personnel changes started at the beginning of the year, Tao noted. The article in the Economic Observer said the sales department will lay off half its workforce, but other departments would also face cuts, including marketing, public relations and administrative functions.
Of note, several execs, including Veronica Wu, Tesla’s former China president, and June Jin, former vice president of communications, have resigned over the last few months. Back in January, CEO Elon Musk commented that sales in China have been weak so far because consumers are worried about charging their electric vehicles.
Statement from Tesla China spokesman
“The purpose is to better respond to the Chinese market,” Tao said in the Monday interview. “The team remains stable and strong.”