Senior Vice President Drew Baglino has resigned from the company, he told X Monday, confirming an earlier report by Bloomberg. He was one of only four named executive officers at Tesla, leading engineering and technology development for its batteries, motors and energy products.
The 18-year company veteran — who has co-hosted earnings calls and shared the stage with CEO Elon Musk at multiple events, including Tesla’s investor day just over a year ago — is leaving along with Rohan Patel, the vice president of public cars. policy and business development. Patel also confirmed his departure on social media, and Musk responded by thanking both executives.
Shares of the automaker fell more than 3% on Monday. The stock has fallen 33% this year.
The shake-up coincides with Musk announcing the decision to cut headcount of perhaps more than 14,000 people worldwide amid a worsening outlook for EV sales. In an email to staff, the CEO cited duplication of roles and the need to reduce costs.
“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 increased productivity,” Musk wrote in the memo, which was seen by Bloomberg News. “It’s nothing. I hate more, but it has to be done.”
Baglino’s departure is likely to heighten concerns among some investors about succession planning at Tesla, where Musk has been CEO since 2008. The billionaire heads six companies and does not devote his full time or attention to the world’s most valuable automaker. Musk also said earlier this year that he prefers to build products elsewhere unless he gets about 25% voting control.
The CEO lost another top deputy in August, when Zachary Kirkhorn stepped down as CFO after 13 years with Tesla.
Wider Struggles
It’s not clear if the departure of Tesla’s top executives was linked to broader struggles at the EV maker. Tesla reported vehicle deliveries earlier this month that missed expectations by a wide margin, posting its first quarterly decline in four years.
Several analysts predict the EV maker’s sales may shrink for the year, citing slow production of its latest model — the Cybertruck — and a hiatus in new products until the company begins production of a next-generation vehicle late next year.
Tesla ended last year with 140,473 employees, nearly double its total three years earlier. It ramped up production at two plants — one in Austin, the other outside Berlin — that began turning out Model Y sport utility vehicles in early 2022. The company began cutting prices across its lineup as those facilities reached higher volumes.
“Over the years, we have grown rapidly with multiple factories growing around the world,” Musk wrote in the email, which was reported earlier Monday by the Electrek blog. “With this rapid growth there has been a duplication of roles and job functions in some. areas.”
A Tense Encounter
Musk’s biographer, Walter Isaacson, described Baglino as an affable engineer with an easy laugh. In his book on Musk published last year, Isaacson recounted a tense first meeting Baglino had with the CEO about how many battery cells Tesla would need to reach its range.
“I never want to be in another meeting with Elon,” Isaacson quoted Baglino as telling Tesla co-founder JB Straubel, who left the company in 2019 but joined its board of directors last year.
Isaacson writes that Straubel reassured Baglino, who is quoted as saying that Musk’s battery cell calculation proved correct.
Baglino has raised about $96 million in periodic stock sales since he was named senior VP and had to begin publicly disclosing his transactions, according to Bloomberg calculations. The sales were carried out according to several pre-arranged business plans, filings show.
Baglino and Tesla’s board chairman, Robyn Denholm, set up stock trading plans late last year allowing them to sell significant amounts of stock. Baglino has made arrangements to potentially sell up to 115,500 shares by the end of this year, according to a regulatory filing.
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Published: 15 Apr 2024, 22:22 IST