The electric vehicle company Tesla is shedding over 10% of its global workforce, equating to over 14,000 employees, according to an internal company email obtained by Electrek. The sweeping layoffs come just weeks after Tesla reported its first year-over-year decline in vehicle deliveries since 2020, signaling turbulence at the once unstoppable EV pioneer.

In the frank email to staff, Tesla’s mercurial CEO Elon Musk did not mince words: “There is nothing I hate more, but it must be done.” He later took to his social media platform X (formerly Twitter) to rationalize the cuts as a necessary “reorganization” that Tesla undergoes every five years to “streamline the company for the next phase of growth.“

About every 5 years, we need to reorganize and streamline the company for the next phase of growth

— Elon Musk (@elonmusk) April 15, 2024

However, the workforce reduction is just the latest bout of grim news for the automaker. Among the high-profile departures are senior vice president Drew Baglino, a nearly two-decade veteran who oversaw Tesla’s energy operations and powertrain engineering. Baglino confirmed his exit on X after Bloomberg originally reported it. Rohan Patel, Tesla’s head of policy, also appears to have disassociated from the company based on his X profile.

The layoffs arrive on the heels of Tesla reporting underwhelming delivery numbers ahead of its Q1 earnings slated for April 23rd. Compounding matters, the company warned investors in January of a projected slowdown in sales growth as it prepares for next-gen vehicle launches. Analysts view these cutbacks as a reactionary measure to preserve profitability amidst softening demand for EVs.

Once the disruptive darling of the automotive industry, Tesla now faces intensifying competition and pricing pressure, particularly from Chinese upstarts like BYD. Last year, the legacy automaker ceded its title as the world’s largest EV maker to BYD, which produced nearly double the electric vehicles as Tesla in 2022.

Tesla’s woes extend beyond the production line as well. The company has reportedly scrapped plans for its much-hyped $25,000 “Model 2” mass-market vehicle, opting instead to forge ahead on an autonomous robotaxi concept. This strategic pivot underscores the company’s recognition that future growth hinges on advanced self-driving capabilities, even as more affordable EVs proliferate from rival brands.