Tesla lays off thousands of workers in corporate restructuring

Lloyd Doyle
June 12, 2018

Tesla said it plans to cut 9% of its workforce as part of a restructuring meant to reduce costs and boost profitability.

Tesla's workforce has grown at an incredible pace since the acquisition of SolarCity, which pushed Tesla's total headcount to over 30,000 employees.

While the automaker has struggled with its ramp up, CEO Elon Musk said last week that the company could begin churning out 5,000 vehicles per week by the end of the month, a target it set out to hit by the end of the second quarter.

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 been burning cash nearly continuously since it was founded 15 years ago.

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


Musk told employees in May that the company was undergoing a "thorough reorganization" as it contends with production problems, senior staff departures and recent crashes involving its electric cars. "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".

In the note, which he tweeted out after it was leaked to media outlets, Musk said that almost all of the cuts would be salaried positions, and that the production staff is largely unaffected.

Musk wrote in the email that the company will never achieve its mission to help move the world to cleaner energy "unless we eventually demonstrate that we can be sustainably profitable".

Musk also said that Tesla had decided not to renew a residential sales agreement with Home Depot (HD.N), and would focus instead on selling its solar products through its own stores and website.

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.

Other reports by Iphone Fresh

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