According to a memo sent to employees by CEO Elon Musk, Tesla will reduce its headcount by more than 10% globally as it grapples with falling sales and an intensifying price war for electric vehicles (EVs). 

The company's shares were down 3% on Monday morning. 

Musk's memo said that as Tesla gears itself for its next growth phase, it is extremely important to examine every aspect of the company for cost reductions and increasing productivity. The website for electric vehicles, Electrek, broke the initial news of the layoffs. 

On Monday, two prominent Tesla execs declared their departure from the company on social media. Senior Vice President of Powertrain and Energy Engineering Andrew Baglino announced his decision to leave the company in a post after 18 years of service, the Associated Press reported.

Rohan Patel, senior global director of public policy and business development, wrote on X, formerly Twitter, about his departure after eight years. 

Baglino, who held several top engineering jobs at the company and was chief technology officer, said leaving was challenging.

He shared that he loved tackling nearly every problem they solved as a team and felt gratified to have contributed to the mission of accelerating the transition to sustainable energy. 

He noted that he struggles to stay still but has no specific goals other than spending more time with his family and young children. In response, Musk thanked Baglino, saying few have contributed as much as him.

On Monday, Tesla's stock closed 5.6% lower at $161.48. The stock prices of EV manufacturers VinFast Auto, Lucid Group, and Rivian Automotive also fell between 2.4% and 9.4%.

The previous quarter saw a dramatic decline in Tesla sales as global competition grew, the rise of electric car sales stagnated, and price reductions were unable to attract new customers.

The company delivered 386,810 cars between January and March, about 9% fewer than the 423,000 it sold over the previous year.