Tuesday, 21 August, 2018

Tesla slides after report says it plans to cut 3,000 jobs (TSLA)

Tesla to Cut Workforce by 9% Musk Says It Won’t Affect Model 3 Production Tesla to Cut Workforce by 9% Musk Says It Won’t Affect Model 3 Production
| 13 June, 2018, 05:51

Tesla will lay off 9 percent of its workforce as it works to reach profitability.

Tesla CEO Elon Musk on Tuesday published an internal e-mail recently sent to staff members in which he shares details regarding the company's reorganization efforts.

In his email to employees, Musk also said the company would stop selling its solar panel units at Home Depot to better focus on sales on its own stores and website. Their goal, he continued, is to accelerate the world's transition to sustainable, clean energy, but it's a mission they will never achieve unless Tesla eventually demonstrates it can turn a profit.

He also adds that Tesla will not renew its residential sales agreement with Home Depot.

The cutbacks come at a time when Chief Executive Elon Musk has said Tesla would be profitable in the third and fourth quarters.

Tesla's latest annual filing last December showed it had 37,543 full-time employees.


Last month, Musk had hinted at a reorganisation but did not give details.

Tesla said the more than 3,000 cuts would affect mostly salaried employees, excluding workers producing its cars.

Shares in the company rose as much as 7 per cent on Tuesday, although they fell back to stand just 3 per cent higher on the day after Musk's announcement.

Nearly all of the jobs are salaried positions, Musk said. For almost all of its history, Tesla has put up losses while investing heavily in technology, manufacturing plants and an extensive car-charging network. As part of the reorg, we are flattening the management structure to improve communication, combining functions where sensible and trimming activities that are not vital to the success of our mission.

Although Tesla had a good May, its Model 3 compact luxury sedan launch has been significantly delayed by production problems. "It is very hard to say goodbye", the CEO wrote. Notably, the firm will continue to hire in certain areas, particularly production. In order to minimize the impact, Tesla is providing significant salary and stock vesting (proportionate to length of service) to those we are letting go.

To those who are departing, thank you for everything you have done for Tesla and we wish you well in your future opportunities.

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