Tesla announced on Monday that it would lay off more than 10% of its workforce globally. Along with this news, a senior executive also revealed his resignation.

In an internal memo, Elon Musk, Tesla’s CEO, informed employees about the layoffs, totaling around 14,000 people.

Musk emphasized the need for cost reduction and increased productivity as the company prepares for its next growth phase.

He expressed regret about the decision, stating, “There is nothing I hate more, but it must be done.”

One of Tesla’s senior vice presidents, Drew Baglino, announced his resignation in a post on X, a social media platform. Baglino, who played a significant role in Tesla’s ascent to prominence, cited his difficult decision to move on from the company after 18 years of service.

Investors typically welcome job cuts as they can lead to higher profits, but Tesla shares fell about 3% following the announcement.

The move comes amidst growing competition and declining sales for Tesla. Despite being a dominant electric car maker, the company’s sales growth has slowed, and it has been sluggish in introducing new models.

Automakers from Asia and Europe have been flooding the market with electric cars, posing challenges to Tesla’s market dominance.

Tesla’s recent sales decline has also raised concerns among investors. The company reported a drop in sales, delivering 387,000 cars worldwide in the first quarter, down 8.5% from the previous year.

This decline marks the first time Tesla’s quarterly sales have fallen year-over-year since the start of the pandemic in 2020.

The company’s strategy of slashing prices to boost demand has resulted in reduced profits per car. However, this approach seems to be losing effectiveness over time.

Rivals such as BYD of China, BMW of Germany, and Kia and Hyundai of South Korea reported increases in electric vehicle sales for the same period.