Tesla to lay off 9% of workers as part of restructuring plan

Irving Hamilton
June 12, 2018

Tesla Inc (TSLA.O) is cutting several thousand jobs across the company as it seeks to reduce costs and become sustainably profitable without endangering the critical ramp up of production of its Model 3 sedan.

"Tesla has grown and evolved rapidly over the past several years, which has resulted in some duplication of roles and some job functions that, while they made sense in the past, are hard to justify today, " Musk wrote in the email.

Tesla employees based at US DIY chain Home Depot and involved with the home solar business Tesla acquired when it bought SolarCity are among those affected, he said.

"Given that Tesla has never made an annual profit in the nearly 15 year since we have existed, profit is obviously not what motivates us".

To ensure that Tesla is well prepared for the future, we have been undertaking a thorough reorganization of our company. Year-to-date, Tesla's headcount is up roughly 15%.

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It's not the first time Tesla has laid off workers. Moreover, he said that this round of layoffs is necessary so that "we never have to do this again". We are a small company in one of the toughest and most competitive industries on Earth, where just staying alive, let alone growing, is a form of victory (Tesla and Ford remain the only American auto companies who haven't gone bankrupt).

In the email, he said the cuts are aimed at eliminating duplicate roles and he does not expect them to affect the firm's production ability.

Following the announcement, Electrek has now learned of a round of layoffs currently ongoing at Tesla, which could see as much as 9% of the workforce leave the company. Musk also has talked about a restructuring of its production line, after failing to meet Model 3 goals.

Up almost 7 percent earlier on Tuesday, shares of the company trimmed gains to stand 3.5 percent higher at $344 by early afternoon. "A focus on "getting lean" is a positive with respect to Tesla's guidance for achieving consolidated profitability in 2018, in our view, " he wrote.

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