The “wave of layoffs” in the auto market in 2024 came earlier than in previous years.
At the beginning of the year, car companies such as Feifan and Avita, as well as parts giants such as Bosch, ZF, Continental Group, Valeo and so on, successively announced layoffs, setting off a wave of layoffs.
By the middle of the year, this wave of layoffs has intensified.
From Tesla’s massive layoffs to the personnel optimization of ideal Motor and Guangzhou Auto Honda, to the layoffs of Volkswagen, the car circle seems to have entered a period of turmoil.
Five car companies have announced layoffs one after another.
According to Geshi Automotive, five car companies have reported or announced layoffs since April.
Tesla CEO Elon Musk plans to cut at least 10% of his workforce, a plan that has been in place for more than a month, but he has not yet completed it, and layoffs are likely to last until at least June, according to people familiar with the matter.
As a matter of fact, Tesla began to reduce the size of its employees in South Korea and provide additional compensation to employees who left voluntarily as part of a global layoff plan, according to South Korean media reports on May 20.
Tesla South Korea submitted a voluntary resignation request to all employees by email and proposed two special severance pay plans, according to people familiar with the matter.
In addition to the basic severance payment, Tesla also offers compensation for up to two months’ salary, but the scheme is only valid for employees who apply for voluntary departure before May 16.
Employees who apply for departure between May 17 and 22 can also receive an additional compensation of one month’s salary in addition to the basic severance payment.
The report also said that Tesla has disbanded his supercharging team in South Korea.
Photo: Tesla and Tesla this round of layoffs not only swept South Korea, but also the European, American and Chinese markets.
Among them, with regard to the layoffs planned for the Chinese market, according to people familiar with the matter, the latest layoffs affect a series of departments of Tesla’s Shanghai plant, including customer service staff, engineers, production line workers and logistics team.
People familiar with the matter added that Tesla’s layoffs last month had a more direct impact on sales representatives.
According to one of the people familiar with the matter, most of Tesla’s laid-off employees in China will receive corresponding compensation (equivalent to one month’s salary for each year of work), as well as three months’ extra salary.
Some employees left the workplace accompanied by the manager, while others left by shuttle bus.
Coincidentally, recently, the media have successively exposed the news of layoffs in two car companies.
On May 16, a number of media reported that after the May Day holiday, ideal would conduct a new round of company-wide personnel optimization.
It is reported that the first “knife” is the human resources department, and there are different proportions of personnel adjustments in the styling department, production and supply chain related departments.
This round of personnel adjustment begins in the first week of May and will end by the end of May.
In addition, the pure electric products team in Shanghai will also see a contraction, and now some of the staff of the team have gone to Beijing Shunyi ideal Automobile headquarters to discuss the follow-up pure electric product planning adjustment.
According to original expectations, ideal car will also release three M-series pure electric products in the second half of this year.
It is also reported that the overall optimization proportion of the ideal car is more than 18%, and the number of employees involved is expected to exceed 5600.
Among them, the sales and service operations department has optimized more than 400 people, the recruitment department has been reduced from more than 200 to 40 to 50, and the smart driving team will be reduced to less than 1000.
Ideal Motors has yet to respond to layoffs.
Another car company that was reported to have laid off staff at the same time as ideal Motor was Guangzhou Auto Honda.
It is reported that since May, Guangzhou Auto Honda has launched large-scale layoffs in the form of step-by-step notice, with an estimated scale of thousands of people.
Insiders called it an overall layoff, involving multiple lines.
At present, the internal turnover process has been started, mainly taking the initiative to quit, and there will be corresponding compensation.
at present, many employees have begun to have a medical examination before leaving.
The layoffs are expected to continue until August.
In response to the layoffs, GAC Honda responded, “in order to ensure the company’s sustainable operation and accelerate strategic transformation, GAC Honda will further improve personnel efficiency.
” Measures include the non-renewal of labor contracts for some employees in the production field for the first time, voluntary negotiation to terminate labor contracts, and so on.
” Photo: GAC Honda, in addition, earlier this month, Volkswagen Group announced a major personnel change plan aimed at streamlining executives to meet current economic challenges and improve the company’s overall performance.
In order to encourage employees to leave voluntarily, Volkswagen Group offers attractive severance incentives for qualified senior executives to receive up to 50, 000 euros (about 390000 yuan) in addition to normal severance pay.
At the end of April, Stellantis’s Stirling Heights Assembly Plant (Sterling Heights Assembly Plant) in suburban Detroit, which produces Ram 1500 models, laid off 199 full-time workers, which took effect on April 22 local time.
Since UAW signed a new contract with Stellantis in November, the company has made a series of layoffs involving hourly, salaried and supplementary workers.
The decline in performance triggered a wave of layoffs, and the news of “layoffs” continued, reflecting the current difficulties for car companies to survive.
From the industry’s point of view, the reason behind this wave of layoffs or the decline in performance-driven “cost reduction and efficiency”.
However, through the official responses of various families, behind the “cost reduction”, we all have different starting points.
For new energy vehicle companies, they often experience rapid growth in the early stages of development, and enterprises may recruit a large number of employees in order to quickly occupy market share.
However, with the gradual maturity and stability of the market, the former blue sea has been transformed into a red sea of fierce competition, and new energy car companies need to face the transformation from rapid expansion to fine operation.
Coupled with this year’s fiercely competitive intelligent electric track, especially the “inner volume”, new energy car companies not only have to fight hand-to-hand with their competitors in the same industry, but also have to deal with the additional impact brought about by the transformation of traditional car companies.
the living space has been unprecedentedly compressed.
Even car companies like Tesla and ideal Automobile, which “made a lot of money” in the last year, can hardly avoid the fact that their net profits have declined significantly.
According to data, Tesla delivered a total of 1.
8 million new cars in 2023, an increase of 38% over the same period last year.
The growth of sales has also boosted Tesla’s revenue.
Tesla’s revenue in 2023 was $96.
77 billion, up 19% from the same period last year, while net profit was $15 billion, up 19% from the same period last year.
But after entering 2024, specialSri Lanka deliveries began to decline.
Data shows that in the first quarter of this year, Tesla delivered approximately 387,000 electric vehicles globally, down 8.
5% year-on-year.
This is the first time in nearly four years that Tesla’s sales in a single quarter have dropped year-on-year.
This change directly reduced its revenue.
In the first quarter, Tesla achieved operating income of US$21.
3 billion, down 9% year-on-year, and net profit was US$1.
129 billion, down 55% year-on-year.
Ideal cars also encounter headwinds.
According to its first quarterly report for 2024, during the reporting period, the company achieved revenue of 25.
6 billion yuan, a year-on-year increase of 36.4%. and achieved net profit of 591 million yuan, a year-on-year decrease of 36.7%. However, on a month-on-month basis, the company’s revenue fell by 38.
6%, and its net profit fell by 90%.
Photo source: Ideal Car, in the face of shrinking profits and redundant personnel, improving efficiency and reducing costs have become the top priority, and layoffs have become a helpless move under the tight capital chain and the pressure of the market.
As Musk said in an internal email to employees released in early April, Tesla’s “rapid growth” has led to “duplication of roles and job functions in certain areas.
” “It is extremely important to prepare the company for the next phase of growth and look at all aspects of the company to reduce costs and increase productivity.
” For traditional car companies such as Volkswagen Group, Stellantis and GAC Honda, this layoff is more to pool resources to support electrification transformation, optimize organizational structure, and ensure smooth transformation in the field of electric vehicles.
, At present, electrification transformation is not only a clear requirement of global policy orientation, but also a direct reflection of changes in consumer demand in the market, which forces automobile companies to accelerate the electrification process.
Photo source: Volkswagen Group, however, this process requires huge R & D investment.
Take Volkswagen Group as an example.
After it announced a five-year transformation investment plan of 180 billion euros for 2023-2027 last year, at the fiscal year 2023 communication meeting held on March 13 this year, Volkswagen announced a new five-year transformation investment plan of 170 billion euros for 2025-2029.
Based on the current exchange rate, it is as high as 1.
337 trillion yuan, accounting for 12% of the automobile business revenue, which shows its firm determination and huge investment in electrification transformation.
Unfortunately, entering 2024, fluctuations in the global economy and market uncertainty have brought considerable challenges to Volkswagen Group.
According to its first-quarter financial report released, its sales revenue was 75.
5 billion euros, down from 76.
2 billion yuan in the first quarter of last year.
operating profit was 4.
6 billion euros, down 20% year-on-year.
and operating profit margin was 6.1%. In view of this, faced with the huge funding gap and short-term financial pressure of electrification transformation, it has become extremely critical to explore and implement diversified financing channels to ensure the sustainability and financial stability of the electrification strategy.
In this context, layoffs, as a means of cost control and structural optimization, are regarded by many companies, including Volkswagen, as one of the key strategies to alleviate financial constraints and ensure the realization of long-term development goals.
Return to First Electric Network Home>.
