Shares of Tesla (NASDAQ:) fell more than 5% after two of the electric vehicle (EV) giant’s top executives left the company following reports of its latest round of layoffs.

Drew Baglino, the Senior Vice President of Tesla, said he has left the company. Baglino has been a key figure at Tesla, serving as one of only four named executive officers and spearheading the development of the company's batteries, motors, and energy products.

With an 18-year tenure at Tesla, he frequently appeared alongside CEO Elon Musk on earnings calls and at significant events like last year’s investor day. Alongside Baglino, Rohan Patel, Tesla’s Vice President of Public Policy and Business Development, is also reportedly leaving the company.

"Baglino is an absolute gut punch loss in our view as he was instrumental in the Powertrain and Energy initiatives at Tesla and was viewed by many as key to the Model 2 initiative over the next few years," Wedbush analysts said in a Monday note.

"The pressure on the stock today is being exacerbated by the Baglino news which was very unexpected," they added.

News of the unexpected exits coincided with reports that Tesla is planning to cut its workforce by more than 10% as the automaker continues to struggle in the challenging EV landscape. The reductions could reach close to 20% in certain divisions, Bloomberg News reported, citing sources familiar with the matter.

The move follows several months of speculation and preparatory actions by the company including instructions to managers to pinpoint essential personnel and the suspension of certain stock rewards and employee reviews.

The layoffs were first revealed by a leaked internal communication to staff.

“Over the years, we have grown rapidly with multiple factories scaling around the globe. With this rapid growth there has been duplication of roles and job functions in certain areas,” the leaked email states, Electreck reported earlier in the day.

“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 increasing productivity.”

“As part of this effort, we have done a thorough review of the organization and made the difficult decision to reduce our headcount by more than 10% globally. There is nothing I hate more, but it must be done. This will enable us to be lean, innovative and hungry for the next growth phase cycle,” it added.

Although the exact layoff percentage remains unknown, over 10% means that a minimum of 14,000 employees will depart the EV giant, said Electreck, citing the company’s total headcount of roughly 140,000.

Wedbush said the latest developments represent a "major buildup" ahead of Tesla's earnings call next week.

"The Street wants and needs answers next week on Tesla's 1Q conference call next Tuesday, April 23rd after the bell as the string of bad news over the last few months has been a horror show for investors in the Tesla story," analysts said.

"We need to hear the rationale for the cost cutting, the strategy going forward, product roadmap, and an overall vision from Musk otherwise many investors might head for the elevators during this Category 5 perfect storm of weak demand Tesla is seeing globally in 2024."