Two prominent Tesla executives left the company on the same day it was reported that Tesla had laid off thousands of employees. Drew Baglino, the Senior Vice President of Powertrain and Energy, and Rohan Patel, the Vice President of Public Policy and Business Development, confirmed their exits. Patel cited unspecified major changes at Tesla as his reason for leaving. Bloomberg was the first to report their departures.
In a conversation with TechCrunch, Patel reflected positively on his experiences, noting his tenure was “amazing” and that he had achieved much more than he ever thought possible thanks to working with a top-notch team. On the social media platform X, Baglino expressed that his decision to leave after 18 years was tough. Elon Musk, Tesla’s CEO, acknowledged their contributions on X, thanking them for their service.
These exits occurred amidst significant layoffs at Tesla, aimed at reducing costs and enhancing productivity. An internal email from Musk revealed that the company was cutting over 10% of its workforce, potentially affecting more than 14,000 employees, as Tesla had a staff of over 140,000 at the end of 2023.
The layoffs come shortly after Tesla reported its first annual sales decline in three years, signaling a broader downturn in electric vehicle demand. The company has cautioned investors to expect considerably slower sales growth in 2024. Additionally, Tesla is at a unique juncture with its product lineup, having recently started production of the high-priced Cybertruck and entering the fourth year of the Model Y without significant updates.
In his email, Musk emphasized the importance of scrutinizing every aspect of the organization to identify cost-saving measures and productivity improvements. He described the decision to reduce the workforce as painful but necessary for maintaining Tesla’s innovation and readiness for future growth.
This isn’t the first major departure at Tesla this past year; Tesla CFO Zachary Kirkhorn stepped down in August 2023. Baglino had been pivotal in engineering Tesla’s powertrain and battery technologies, and had become known for his active engagement on Musk’s platform. Patel, with a background as a special assistant to former President Barack Obama and an advisor on climate and energy, had also been active in community interactions recently.
Despite these challenges, Tesla achieved a record shipment of 1.8 million EVs in 2023. However, the company faced pressure from high-interest rates and increased competition, leading to price reductions on several key models. Plans for a budget-friendly $25,000 EV appear to have been shelved or delayed, with Tesla possibly pivoting to focus on a new robotaxi platform announced by Musk for an upcoming release.
