After a disappointing first-quarter sales, Tesla plans to lay off approximately 10% of its workforce, according to reports from multiple media outlets. The decision comes as CEO Elon Musk aims to streamline operations and cut costs to address mounting challenges.

The announcement, detailed in a memo sent to employees, could impact around 14,000 workers out of the 140,473 employed by the company in Austin, Texas. Musk emphasized the necessity of scrutinizing every aspect of the company to enhance productivity and reduce expenses as Tesla gears up for its next phase of growth.

News of the layoffs coincided with the departure of two key Tesla executives, Andrew Baglino and Rohan Patel, who announced their exits on the social media platform X. Baglino, the senior vice president of powertrain and energy engineering, cited his 18-year tenure with the company before revealing his decision to leave. Similarly, Patel, the senior global director of public policy and business development, announced his departure after eight years with Tesla.

Following the news, Tesla’s shares experienced a nearly 3% decline. The company’s stock has already faced significant challenges this year, with a decrease of about one-third in value, attributed to slowing electric vehicle sales and intensified competition globally.

Tesla’s first-quarter sales plummeted as electric vehicle sales growth slowed worldwide, despite efforts such as price cuts to attract more buyers. The company reported delivering 386,810 vehicles from January through March, representing a nearly 9% decline compared to the same period last year.