Elon Musk’s Tesla overhaul hits the executive bench he’s been touting

Elon Musk’s Tesla overhaul hits the executive bench he’s been touting

More than a year ago, Elon Musk shared the stage at Tesla ( TSLA.O ), opening a new tab investor day in Texas with 16 executives who gave detailed presentations on the company’s technology and growth plans, then lined up behind their boss in a show of unity.

“We obviously have significant bench strength here,” Musk said at the time, responding to investor concerns that the world’s most valuable automaker was too much of a one-man show.

Now, at least five members of the team are missing, a Reuters analysis shows. Tesla, Musk and the 16 executives on stage last year could not be reached for comment.

Musk in a recent email to senior managers outlined plans to lay off hundreds more employees, including two top executives, the Information reported.

“Hopefully this action makes it clear that we need to be really tough on headcount and cost reduction,” Musk wrote in an email, the report said.
Strategy shift

With Tesla’s earnings, profits and stock price falling, Musk has reasserted his dominance of the company. For some investors, that’s more important than executive turmoil.

“Elon’s not there and we have this acquisition? That’s really bad,” said Gene Munster, managing partner with Deepwater Asset Management and a Tesla investor. “If Elon is there, he’s going to use the talent to get things going so it all depends on Elon staying part of the story.”

Musk has signaled a significant shift in strategy in response to falling sales and fiercer competition – changes that could see executives running operations no longer central to the new plan.

Tesla’s future lies in artificial intelligence and robotaxis, not conventional car manufacturing, Musk told investors in April.

Musk puts action behind the words. He has ordered staff cuts of 10% and scrapped plans for a new line of low-cost vehicles in favor of revamping existing models to develop lower-priced entries. Tesla said it would temporarily halt new factory construction until the company’s sales hit 3 million vehicles a year – enough to fill the automaker’s existing production operations.

Two senior executives who flanked Musk at last year’s investor day are gone: Zach Kirkhorn, the former CFO, resigned with a nondisclosure agreement, according to Tesla’s regulatory filing. Drew Baglino, Tesla’s former chief battery engineer, left a wave of layoffs ordered by Musk last month. Baglino dumped $181 million in Tesla stock when he left.

Rebecca Tinucci, who leads Tesla’s charger team, was one of two women on stage for last March’s investor day.

“We’ve understood since Day One that a great charging experience is the link to electric vehicle adoption,” Tinucci said as he walked on stage. The following year, nearly all rival automakers in the United States agreed to adopt Tesla’s charging standards and cut deals to allow their EV buyers to charge at Tesla stations.

Tinucci and most of his team were fired this week. In a post on his social media platform X, Musk said Tesla plans “to expand the Supercharger network, just at a slower pace for new locations and more focused on 100% uptime and expansion of existing locations.”

Another executive on stage who left was Colin Campbell, former vice president of powertrain engineering.

Losing so many executives is something Tesla’s board needs to monitor, said Charles Elson, founding director of the Weinberg Center for Corporate Governance at the University of Delaware.

“Many departures quickly indicate a problematic leadership style,” he said. “You shouldn’t lose so many people so quickly.”

“If you buy into the narrative that Tesla is fundamentally an AI company, it’s probably nothing to worry about,” said KC Boyce, vice president at data analytics and advisory firm Escalent. “It fits the idea of right-sizing and resourcing the business to deliver on the promise of fully self-driving and robotaxi.”

Other senior Tesla executives, who were not on stage during the 2023 investor day, have left in recent weeks.

Daniel Ho, a former Ford executive and 10-year Tesla veteran who was director of the new car program, is no longer with the company. Rohan Patel, a former Obama administration official who was Tesla’s Vice President for public policy and key to expansion plans for India, said he would leave.

Another executive to leave is Allie Arebalo, Tesla’s senior director of human resources, two people familiar with the matter said Wednesday.

Martin Viecha, the head of investor relations who was also on stage last year with Musk, announced his departure at the end of an April 24 conference call with analysts.

Unlike many other departing executives, Viecha received a warm welcome from Musk. “The reason I’m calling you is because I think your analysis of Tesla is the best I’ve seen,” Musk said during the call.

Some analysts say the executive team is critical given the challenges facing EV makers.

“Having a solid bench behind Musk is important at this crucial time given the Category 5 storm Tesla is experiencing,” Wedbush Securities analyst Dan Ives said.