Vehicles are parked in front of the Tesla Inc. solar panel factory in Buffalo, New York, United States, Wednesday, December 26, 2018.
Andrew Harrer | Bloomberg | Getty Images
Tesla is laying off 285 employees in New York state as part of a broader restructuring, according to a WARN notice filed in the state. Most of those employees worked at the company’s Buffalo plant and a handful at an area store and service center, according to the filing.
Earlier this week, Tesla CEO Elon Musk sent a company-wide memo saying the automaker would reduce its global workforce by more than 10%. Few details were shared by Tesla about the layoffs, beyond this leaked note that the downsizing would help “prepare the company” for a “next phase of growth.”
The announced layoffs in Buffalo represent a 14% workforce reduction.
Tesla took over the Buffalo factory after completing the $2.6 billion acquisition of solar installer SolarCity in 2017.
Tesla’s acquisition of SolarCity was widely criticized as a bailout for a struggling solar company with deep ties to Tesla’s CEO and board of directors. Musk funded and co-founded SolarCity with his cousins, Lyndon and Peter Rive, and served as its president. Another Musk company, SpaceX, had purchased SolarCity bonds and if the company had gone bankrupt, it would have lost its investment as well.
Empire State taxpayers spent about $1 billion to build the Buffalo plant, including purchasing equipment, in hopes of supporting the creation of thousands of high-tech jobs in the region . While Tesla announced it would manufacture solar panels at the Buffalo factory, its efforts to expand its solar business have failed over the years.
In 2023, Tesla’s solar deployments declined to a total of 223 megawatts, a 36% drop from 348 megawatts the previous year. This represents the lowest level of solar deployments for Tesla since 2020 when they reported 205 megawatts.
Tesla’s energy division still generates the bulk of its revenue from the sale of battery backups, also known as battery energy storage systems, which are used in residential, commercial and utility projects.
Instead of manufacturing solar panels as its primary business in Buffalo, Tesla assembles Supercharger equipment there and has already moved part of its Autopilot data labeling team there. The company also told shareholders it would build supercomputer hardware in Buffalo.
Earlier this month, Reuters reported that Tesla would focus its efforts on robo-taxi technology and abandon plans to produce a more affordable electric vehicle.
On Tuesday afternoon, Musk wrote in a job on his social network
Tesla has not yet indicated whether the company will stick to its 2023 “blueprint,” which lays out “a proposed path to achieving a sustainable global energy economy through end-use electrification and sustainable production and storage of electricity.
Tesla plans to discuss first-quarter results with shareholders on April 23, at which point executives are expected to reveal more about the restructuring and upcoming strategy.
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