Tesla Motors Inc Slashes Headcount In China After Dismal Sales Figure

Tesla Motors Inc Slashes Headcount In China After Dismal Sales Figure
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Tesla Motors seeks to eliminate some work positions at its China division to restructure its administration and build a “stronger and more efficient team,” according to Gary Tao, a Tesla spokesperson. However, Tao refused to comment on the number of positions being trimmed, says a report from The Wall Street Journal.

Tesla China in restructuring mode

The spokesperson confirmed the reduction in the workforce, saying “Some people will go,” following a local newspaper report that claimed the carmaker looks to decrease its staff strength by 30%.

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Previously, Chinese newspaper Economic Observer claimed that at least 180 employees are expected to lose their jobs. The majority of them are going to be from the sales department, which is expected to cut almost half of its workforce, the most among all departments.

The restructuring program involving workforce reduction is directed toward creating a better management team as indicated by Tao, who claimed that the purpose of such a re-arrangement is to respond better to the Chinese market. In addition, Tom Zhu, the newly appointed Tesla China president after Veronica Wu, is optimistic about Tesla’s growth in China and has described current challenges faced by the company as “natural growing pains” that precede good days ahead.

However, there are experts who differ from the company’s optimistic stance and view the decision to cut jobs as there being “something wrong” with the company.

Poor sales to blame for job cuts

Tesla Motors’ decision concerning jobs cut came in the wake of poor financial results due to lower-than-expected sales figures during the fourth quarter. Citing JL Warren Capital, a report from The Wall Street Journal says only a meager 2,500 EVs were registered in the last nine months of 2014. Moreover, just 469 cars were sold in January 2015, which is on par with 471 in November.

The primary reason for such low sales, as claimed by CEO Elon Musk, has been consumers’ concerns about charging their electric vehicles, as most Chinese consumers tend to reside in apartment buildings, which makes a family garage a rarity in China. To solve this, Tesla employees are working with property managers and local officials to raise awareness about the issue. Moreover, the company has joined hands with companies like China Unicom and Soho China to build charging stations across the country.

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