Published: Wed, June 13, 2018
Finance | By Claude Patterson

Tesla laying off 9 percent of workforce

Tesla laying off 9 percent of workforce

Musk said most Tesla employees who had worked at the company's Home Depot displays will be allowed to work at Tesla's stores.

In the letter, which is signed by Musk, Tesla employees are told that most of the "approximately 9%" of laid off workers were nearly entirely composed of salaried positions. Musk said the layoffs won't affect production of the Model 3, since no production associates are being be cut.

Musk goes on to acknowledge that while profitability has never been the electric automaker's strong suit, the company can not go on ignoring the inefficiencies in its workforce if it hopes to achieve its environmental and social goals. "We will never achieve [our] mission unless we eventually demonstrate that we can be sustainably profitable", he wrote in the letter. According to Bloomberg, this is the largest layoff in Tesla's 15-year history.

Tesla has been burning through cash as it continues to spend on its assembly line and prepares for new investments on projects such as the Model Y crossover and its Gigafactory.

The company is making the move now so it never has to do it again, he wrote.

To be clear, Tesla will still continue to hire outstanding talent in critical roles as we move forward and there is still a significant need for additional production personnel. That means about 3,379 employees are getting a pink slip.

Shares of Tesla sank about three percentage points from their intra-day high on Tuesday after Electrek reported the company was planning to lay off over 3,000 employees - or roughly 9% of its workforce.

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.

Noting that a "difficult job" remains ahead, Musk added: "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 is up 11.3% this year. A majority of Tesla employees working at Home Depot will get offers to work in Tesla's own stores. Tesla said it would focus its solar energy sales efforts through its electric vehicle stores and online.

"It is very hard to say goodbye", Musk said in the letter.

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