ibusinesslines.com
ibusinesslines.com August 19, 2018


Tesla to cut staff by 9 percent in drive for profitability

12 June 2018, 10:54 | Kelvin Horton

Image Around 4,000 Tesla jobs are at risk

Image      Around 4,000 Tesla jobs are at risk

Employees told the paper that they received "little or no warnings" before the firings, which reportedly targeted 400 to 700 employees, leading to "lowered morale through many departments".

Tesla will lay off 9 percent of its workforce as it works to reach profitability. Cuts will not affect factory workers and "production associates" crucial to manufacturing the Model 3 and Tesla's hope of turning an annual profit for the first time in 2018.

Nearly all of the jobs are salaried positions, Musk said.

A sign is seen outside Tesla Motors' new showroom in Manhattan's Meatpacking District in New York City, U.S., December 14, 2017.

Shares of electric automaker Tesla rose during Tuesday's trading session after one Wall Street firm raised its Model 3 production estimates by 50%.

The move is part of an organizational restructuring that Musk announced earlier in the year. "What drives us is our mission to accelerate the world's transition to sustainable, clean energy, but we will never achieve that mission unless we eventually demonstrate that we can be sustainably profitable".

SpaceX founder Musk speaks at a press conference following the first launch of a SpaceX Falcon Heavy
Image Elon Musk announced the plans in an email to employees which was later leaked

The cuts come as the company aims to shrink costs and become profitable, Musk said.

Musk said the company was notifying affected employees this week. Year-to-date, Tesla's headcount is up roughly 15%. I also want to emphasize that we are making this hard decision now so that we never have to do this again.

The company did not say how much money the cuts would save.

In addition to the restructuring, Tesla won't renew a residential sales agreement with Home Depot Inc. and focus instead on selling solar power in its own stores and online, Musk wrote. The company is now producing just under 3,000 per week, Bloomberg estimates. Tesla is up 11.3% this year.

He wrote that reaching Musk's Model 3 production goal of 5,000 vehicles per week by the end of June is still the primary driver of profitability.




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