Tesla’s workforce at its factory outside Austin, Texas, shrank by 22% last year as the company struggled with a second consecutive year of declining sales. The plant, which has become one of the largest employers in the area since opening in 2022, saw its workforce drop from 21,191 in 2024 to just 16,506 workers in 2025.

Despite this reduction, Tesla’s global workforce still grew slightly, increasing by nearly 7% from 125,665 employees in 2024 to 134,785 in 2025. This growth was more pronounced outside the Austin facility, indicating a shift away from some of its local operations.

It remains unclear which teams were most affected by these cuts, but Tesla has invested heavily in the Texas plant, pouring over $6.3 billion into it so far. CEO Elon Musk had even relocated Tesla’s headquarters to this factory in 2021 before it opened, underscoring its strategic importance.

The question now is whether these workforce reductions signal a broader shift within Tesla or if they are part of the company’s ongoing efforts to streamline operations and cut costs. As electric vehicles continue to gain popularity, such moves could shape the future of automotive manufacturing in Texas.