Tesla cuts 3,600 workers - 9 percent of its workforce

Markets Insider

Musk also has talked about a restructuring of its production line, after failing to meet Model 3 goals.

CEO Elon Musk says in an e-mail to workers Tuesday that the cuts amount to about 9 per cent of the company's work force of 40,000.

Musk tweeted a series of screenshots of his email to Tesla employees after he said the message had "already leaked to the media" on Tuesday, June 12.

The terminated jobs will be confined to salaried positions and not include any production workers, meaning the company's Model 3 productions targets will apparently go unaffected.

In an email that he released on Twitter, Musk that the job cuts were part of a "comprehensive organizational restructuring" driven by "the need to reduce costs and become profitable".

As CEO Elon Musk notes in a letter to employees, the company has never made an annual profit. Year-to-date, Tesla's headcount is up roughly 15%.


Tesla has been facing mounting pressure from investors to ramp up production of its first affordable auto model, the Model 3. That makes these layoffs much more significant than the hundreds of workers Tesla fired last fall.

It is worth noting that the email also comes following several weeks of press reports outlining the auto company's troubles and predicting exactly what has happened - the need to cut costs while keeping production moving as fast as possible.

Tesla shares pared an earlier gain of as much as 6.9 per cent and were up 3.2 per cent to US$342.81 as of 2:21 p.m.in NY trading. Most Tesla employees working out of Home Depot will have the opportunity to move to Tesla stores, Musk said.

Tesla has also pushed back against accusations of poor worker safety and discrimination at company facilities, and headline-grabbing wrecks and investigations that have raised questions about the company's semi autonomous technology. The company said the firings involved non-manufacturing positions and were unrelated to production delays involving the Model 3.

Tesla is ending its partnership with Home Depot and will remove its branded kiosks from as many as 800 of the home improvement chain's US stores by the end of the year. It will instead "focus our efforts on selling solar power in Tesla stores and online", he said.

"Profit is obviously not what motivates us", Musk wrote. "It is very hard to say goodbye".

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