Published: Tue, June 12, 2018
Economy | By

Tesla to cut staff by 9 percent in drive for profitability

Tesla to cut staff by 9 percent in drive for profitability

On Tuesday, Musk tweeted that the company will cut 9 percent of its workforce as part of the restructuring and to "become profitable".

Tesla told CBC News that it had over 42,000 employees around the world.

Tesla is reportedly planning to lay off approximately 4,100 of its 46,000 employees to cut costs.

Tesla will lay off almost one in 10 of its workers but the cuts won't hamper its drive to meet production targets for the Model 3 sedan, according to company CEO Elon Musk.

Tesla has not made an annual profit in its 15 years of doing business, and it has posted only two quarterly net profits.

Mr Musk said the job cuts were a "difficult decision".

Last month Mr Musk said the company was planning a wide-ranging reorganisation that would flatten its management structure.

The company added that its rapid growth over the past several years has resulted in some duplication of roles and job functions.

Musk said that the layoffs do not affect production staff and stressed that this wouldn't hurt the company's efforts to hit big targets for production of the Model 3 sedan. For almost all of its history, Tesla has put up losses while investing heavily in technology, manufacturing plants and an extensive car-charging network. Moreover, he said that this round of layoffs is necessary so that "we never have to do this again".

Musk also announced that the company's solar panel unit has chose to end its agreement to sell via Home Depot stores so it can focus on sales in Tesla's company stores and online.

The move follows Tesla starting a brutal review of contractors and firing everyone that is not vouched for by an employee last month. I'm deeply grateful for your many contributions to our mission. 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 remaining, I would like to thank you in advance for the hard job that remains ahead.

As many as 9% of Tesla's workforce will be let go.

Like this: