Tesla is planning to reduce its global workforce by over 10%

Tesla said on Monday that it would lay off more than 10% of its global workforce, a major reduction that comes as the automaker looks to compete with lower-priced offerings from competitors around the world.

The decision was announced in a companywide email from Tesla CEO Elon Musk, who said the layoffs will enable the automaker to “be lean, innovative and hungry for the next growth phase cycle.”

“As part of this effort, we have done a thorough review of the organization and made the difficult decision to reduce our headcount by more than 10% globally,” Musk said.

Tesla’s workforce stands at slightly above 140,000 people, meaning the cuts could affect around 14,000 employees.

Tesla reported a drop in sales for the first quarter for the first time in nearly four years.

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The electric vehicle maker also reportedly walked back its plans to pivot to a more inexpensive electric vehicle, a longtime goal of Tesla’s and one that investors had seen as a key to driving more EV sales growth in the United States. Musk, though, denied those reports.

Tesla laid off 4% of its workforce in New York last year. The EV maker did not respond to the Washington Examiner’s request for comment on the planned layoffs.