Tesla is laying off 285 employees in the state of New York as part of a broader restructuring according to a WARN notice filed in the state. Most of these employees worked at the company’s Buffalo factory and a handful at a store and service center in the area per the filing.
Earlier this week, Tesla CEO Elon Musk sent a company-wide memo saying that the automaker would be reducing more than 10% of its global workforce. Few details have been shared by Tesla about the layoffs beyond that leaked memo which said the reduction in workforce would help, “prepare the company” for a “next phase of growth.”
The layoffs disclosed in Buffalo comprise a 14% reduction in headcount there.
Tesla took over the Buffalo factory after they completed a $2.6 billion acquisition of solar installer SolarCity in 2017.
The acquisition of SolarCity by Tesla was widely criticized as a bailout for an ailing solar business with deep ties to the Tesla CEO and board. Musk funded and co-founded SolarCity with his cousins, Lyndon and Peter Rive, and served as chairman there. Another Musk company, SpaceX, had purchased SolarCity bonds and if the company had gone bankrupt, they would have lost their investment as well.
Empire state taxpayers doled out around $1 billion to build the Buffalo factory, including equipment purchases, hoping to support the creation of thousands of high-tech jobs in the region. While Tesla said it would manufacture solar panels at the Buffalo factory, its efforts to grow its solar business have faltered through the years.
In 2023, solar deployments by Tesla declined to a total of 223 megawatts, down 36% from 348 megawatts in the previous year. That represented the lowest level of solar deployments for Tesla since 2020 when they reported 205 megawatts.
Tesla’s energy division still generates most of its revenue through sales of backup batteries, also known as battery energy storage systems, which are used in residential, business and utility-scale projects.
Instead of manufacturing solar panels as their primary business in Buffalo, Tesla assembles Supercharger equipment there and moved part of its Autopilot data labeling team there previously. The company has also told shareholders it would build supercomputer hardware in Buffalo.
Early this month, Reuters reported that Tesla would be focusing efforts on robotaxi technology and scrapping plans to produce a more affordable EV.
On Tuesday afternoon, Musk wrote in a post on his social network X that he is “not quite betting the company, but going balls to the wall for autonomy.”
Tesla has not yet said whether the company will stick with its 2023 “master plan,” which laid out “a proposed path to reach a sustainable global energy economy through end-use electrification and sustainable electricity generation and storage.”
Tesla plans to discuss first-quarter results with shareholders on April 23, and executives are expected to reveal more about the restructuring and strategy going forward then.
