Two prominent Tesla executives have exited the company coinciding with the dismissal of thousands of employees. Drew Baglino, Tesla’s Senior Vice President of Powertrain and Energy, along with Rohan Patel, Vice President of Public Policy and Business Development, have both left the firm, as confirmed by Patel to TechCrunch. Citing significant but unspecified changes at Tesla, Patel remarked that leaving was both personally favorable and potentially beneficial for Tesla. He noted his tenure as incredibly successful, attributing much to his team. Baglino, expressing on the social platform X, described his departure after 18 years as challenging. Tesla CEO Elon Musk acknowledged their contributions on X.
The exits occurred as Tesla undertakes extensive layoffs to diminish costs and enhance efficiency, detailed in an internal memo by Musk that Electrek and Bloomberg News initially disclosed. The layoffs affect over 10% of Tesla’s workforce, potentially impacting more than 14,000 employees out of over 140,000.
Musk declared these job cuts shortly after Tesla noted its first annual sales decline in three years, amidst a broader slowdown in electric vehicle demand. He warned of likely subdued sales growth in 2024, contrasting with Tesla’s ambitious target of 50% annual growth. Additionally, Tesla is navigating a period with few new product launches, with the high-cost Cybertruck beginning production and the Model Y aging without major updates.
In his email, Musk emphasized the importance of cost-cutting and productivity enhancements as Tesla gears up for future growth. He highlighted issues like role duplication that arose during rapid expansion. The job reduction, described by Musk as a tough but necessary decision, aims to streamline operations and sustain innovation and agility for future growth phases.
Baglino’s exit marks the second high-level departure within a year, following Tesla CFO Zachary Kirkhorn’s resignation in August 2023. Baglino had a significant role in developing Tesla’s powertrain and battery technologies and was notably active on Musk’s social media platform. Patel, with a background as a special assistant to former President Barack Obama and as an advisor on climate and energy, had recently been actively engaging with Tesla’s community.
Tesla shipped a record 1.8 million EVs in 2023. But the company spent much of the year slashing prices on its most popular models in an effort to counterbalance the impact of high interest rates and increased global competition. The company has also reportedly dropped — or at the very least, delayed — plans to build a lower-cost EV that would retail starting at around $25,000, opting instead to use the underlying platform being developed to power an alleged robotaxi that Musk said will debut on August 8.
