Empathy vs Efficiency: Lessons from Tesla’s 2024 Layoffs
- Axel Menzel
- Aug 10
- 4 min read
When cost‑cuts meet cold emails – what Tesla’s 2024 restructuring reveals about change communication.
Large-scale restructurings are always a test of leadership culture. Decisions about job cuts affect livelihoods, careers, and a company’s culture. When Tesla announced in April 2024 that it would cut more than 10% of its global workforce - roughly 14,000 positions - it wasn’t just the scale that drew attention, but how the decision was communicated. Internal emails spread quickly on social media, criticised for their abrupt, impersonal tone. This case study explores what went wrong and what can be learned about communicating sensitive transitions.
Background – Why Tesla Cut Jobs
Tesla entered 2024 facing falling sales, intense price competition, and questions about its product roadmap. Reuters reported that an internal memo said the company planned to lay off more than 10% of its workforce to “reduce costs and increase productivity”. CEO Elon Musk wrote on X (formerly Twitter) that Tesla reorganises roughly every five years to prepare for the next growth phase.
Although there had been layoffs in 2022, headcount had risen from roughly 100,000 at the end of 2021 to over 140,000 by late 2023. The April 2024 cuts coincided with departures of senior leaders Drew Baglino and Rohan Patel, raising concerns about stability.
Musk framed the layoffs as a necessary step to keep the company “lean, innovative and hungry.”
Communication Tactics – What Was Said and How
The initial layoff email to employees
A leaked internal email sent to affected staff began with a formal “Dear Employee” and explained that rapid growth had created duplicate roles. It said that after a thorough review, the employee’s position was eliminated and thanked them for their hard work.
The tone then became blunt: “Your last working day will be today, April 14, 2024. Effective now, you will not need to perform any further work and will no longer have access to Tesla systems and physical locations.” Details on severance, benefits continuation and other documents were promised within 48 hours.
Many workers received this email overnight; some only realised they were locked out when they arrived at work. The abruptness resembled an automated termination notice and felt disrespectful.
Second email to employees with medical/work restrictions
The Verge later obtained a termination email sent to employees with permanent medical accommodations. It read:
“After a careful review of your permanent work restrictions and your role, it was determined that there was no reasonable accommodation that would enable you to perform the essential functions of your position… We have not identified any openings for which you appear qualified… We will begin processing your separation from employment with Tesla, effective May 3, 2024.”
The Verge noted that this message felt “extremely chilly”.
Musk’s apology about severance
Criticism also focused on severance terms. Several laid-off employees with high length of services told Business Insider (via Business Today) that they initially received two months’ pay. Musk later admitted that some packages were “incorrectly low” and apologised: “As we reorganize Tesla, it has come to my attention that some severance packages are incorrectly low. My apologies for this mistake. We are correcting it immediately.” U.S. law requires 60 days’ pay and notice for mass layoffs, while industry norms often provide one to two weeks of salary per year of service - so Tesla’s initial offer was on the low side.
Reactions – How People Responded
Employees and social media
Some employees turned to LinkedIn to express their shock. For instance, Jake Knowles - recently promoted to a senior coordinator role - said he was laid off just two months after his promotion. Others reported sleeping in cars or making long commutes only to learn via email that their badges no longer worked. These stories went viral and intensified criticism of Tesla’s culture.
Investors and analysts
Analysts and investors had mixed views. Some saw the cuts as a proactive move to protect margins and welcomed the removal of duplicate roles. Others viewed the sudden departures of top executives and the abrupt layoffs as a “gut punch,” signalling deeper issues. Dan Ives of Wedbush Securities called the exit of Drew Baglino, Tesla’s longtime Senior Vice President of Powertrain and Energy Engineering, “unexpected” and said it heightened uncertainty about Tesla’s strategy.
Learnings & Best Practices for Transition Communication
💡 Lead with empathy. Both emails were generic and lacked personal gratitude. A personalised thank-you and acknowledgement of the emotional impact can soften the blow. (Airbnb, for instance, used a heartfelt CEO letter in 2020 as a more empathetic model.)
💡 Be transparent and thorough. Tesla’s email promised details “within 48 hours”, leaving affected workers uncertain. Providing complete information upfront reduces anxiety.
💡 Timing and delivery matter. Late-night emails and automated messages feel disrespectful. Whenever possible, notify employees during working hours and offer a direct HR or manager contact. Town halls or personal calls can supplement written notices.
💡 Explain the ‘why’ and ‘how’. Tesla mentioned cost cuts and duplication but initially failed to link layoffs to a broader plan. Sharing clear strategic context (such as focusing on new product directions) helps employees and investors understand why cuts are necessary.
💡 Align severance with norms and legal requirements. Tesla initially offered two months’ pay. Given that many employers provide one to two weeks per year of service and U.S. law mandates 60-day pay for large layoffs, more generous packages demonstrate respect and reduce legal or reputational risk.
Balancing Efficiency and Humanity
Tesla’s 2024 restructuring illustrates the tension between operational efficiency and human-centred communication. Cost cutting and streamlining may be necessary, but the way changes are communicated determines whether trust is preserved or damaged. Abrupt, overnight emails may fulfil legal obligations but risk alienating employees and tarnishing the brand. By prioritising empathy, transparency and considered timing, companies can navigate difficult transitions with greater dignity and integrity.
Sources that we used to create this article
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