Elon Musk's Tesla Overhaul Impacts Executive Team He Previously Praised
Several key members of Tesla's executive team, once praised by Elon Musk, have left the company. Musk's recent email to senior managers outlined plans for further layoffs, including the departure of two top executives. The departures include the former CFO, chief battery engineer, head of the charging team, and the vice president of powertrain engineering.
Just over a year ago, these executives stood alongside Musk during the company's investor day, presenting detailed plans for technology and growth. However, a recent analysis by Reuters reveals that at least five members of that team are no longer with the company.
Musk, who recently sent an email to senior managers outlining plans for further layoffs, including the departure of two top executives, seems to be doubling down on his commitment to cost reduction. The email, as reported by The Information, stated, "Hopefully these actions are making it clear that we need to be absolutely hard core about headcount and cost reduction."
Among the executives who have left Tesla is Zach Kirkhorn, the former CFO, who resigned with a nondisclosure agreement. Drew Baglino, the former chief battery engineer, also departed during a wave of layoffs ordered by Musk last month. Interestingly, Baglino sold $181 million worth of Tesla stock as he left the company.
Rebecca Tinucci, who headed up Tesla's charging team and was one of two women on stage during the investor day last March, was also let go along with much of her team. Tinucci emphasized the importance of a great charging experience for electric vehicle adoption during her presentation. Since then, many rival automakers in the United States have adopted Tesla's charging standards and formed agreements to allow their EV buyers to charge at Tesla stations.
Colin Campbell, the former vice president of powertrain engineering, was another executive who left the company. The departure of so many executives has raised concerns among experts, such as Charles Elson, the founding director of the Weinberg Center for Corporate Governance at the University of Delaware. Elson suggests that the Tesla board should closely monitor the situation, as the rapid departures may indicate a problematic leadership style.
Despite the executive churn, some investors believe that Musk's continued presence at Tesla is crucial. Gene Munster, managing partner with Deepwater Asset Management and a Tesla investor, stated, "Elon's not there and we have this turnover? That's very bad. If Elon's there, he's going to draw on talent to keep things going, so it really all comes down to Elon remaining a part of the story."
Musk has been implementing significant strategy shifts in response to falling sales and increased competition. He has ordered a 10% reduction in staff and decided to scrap plans for a new, low-cost line of vehicles in favor of revamping existing models to develop lower-priced entries. Additionally, Tesla will pause construction of new factories until the company's sales reach 3 million vehicles per year.
While some analysts express concern over the executive team's departures, others believe that if Tesla is truly an AI company at its core, the changes may align with the company's focus on artificial intelligence and robotaxis. K.C. Boyce, vice president at data analytics and advisory firm Escalent, suggests that the restructuring may be necessary to deliver on the promise of full self-driving and robotaxi capabilities.
In the midst of these changes, other senior Tesla executives who were not present during the 2023 investor day have also left the company. This includes Daniel Ho, a former Ford executive and 10-year Tesla veteran, who had been the director of new car programs. Rohan Patel, a former Obama administration official who played a key role in Tesla's expansion plans for India, has also announced his departure.
As Tesla faces significant challenges, having a strong executive team behind Musk is crucial. Analysts, such as Dan Ives from Wedbush Securities, emphasize the importance of a robust bench during this pivotal time for the electric vehicle maker.
Several key members of Tesla's executive team, once praised by Elon Musk, have left the company.
Musk's recent email to senior managers outlined plans for further layoffs, including the departure of two top executives.
The departures include the former CFO, chief battery engineer, head of the charging team, and the vice president of powertrain engineering.
Source: REUTERS