In the midst of Tesla Inc.’s largest-ever round of job cuts and slowing electric vehicle (EV) demand, Senior Vice President Drew Baglino has announced his resignation, adding to a string of high-level departures from the electric carmaker.
Baglino, a Tesla veteran of 18 years and a key figure in the company’s engineering and technology development for batteries, motors, and energy products, confirmed his departure on Monday. He had been one of only four named executive officers at Tesla and had co-hosted earnings calls alongside CEO Elon Musk.
Rohan Patel, Tesla’s vice president of public policy and business development, also announced his departure on social media, marking another exit from the company’s leadership team. Musk thanked both executives in response to their announcements.
The departures come as Tesla grapples with challenges including a significant workforce reduction, with cuts potentially reaching up to 20% in some divisions. Musk had previously announced plans to cut headcount by more than 14,000 globally due to a deteriorating outlook for EV sales.
“As we prepare the company for our next phase of growth, it is extremely important to look at every aspect of the company for cost reductions and increasing productivity,” Musk wrote in a memo seen by Bloomberg News. “There is nothing I hate more, but it must be done.”
Tesla’s stock fell more than 3% on Monday, extending its decline to 33% this year. The company has faced scrutiny over its sales performance, reporting a first quarterly decline in four years earlier this month. Analysts are concerned about slow output of the Cybertruck and a lull in new products until late next year.
The departure of Baglino has raised questions among investors about Tesla’s succession planning and Musk’s multiple roles across his various companies. Musk has been Tesla’s CEO since 2008 and has recently lost other top executives, including CFO Zachary Kirkhorn last August.
Tesla’s rapid growth over the years, with its workforce nearly doubling to 140,473 employees by the end of last year, has led to duplication of roles and job functions, according to Musk. The company has been ramping up production at its plants in Austin and Berlin, which started producing Model Y vehicles in early 2022.
In his book on Musk, biographer Walter Isaacson described Baglino as a personable engineer but also recounted a tense meeting between Baglino and Musk over battery-cell calculations. Despite the tensions, Baglino’s contributions to Tesla’s engineering and technology development have been significant.
Baglino has netted approximately $96 million from periodic share sales since becoming a senior VP, according to Bloomberg calculations. He and Tesla’s board chair, Robyn Denholm, had set up share-trading plans late last year, allowing them to sell significant amounts of stock.
As Tesla navigates these challenges, investors and analysts will be closely watching for further developments and the company’s strategy to address its current headwinds.