Business

Tesla eliminates 9 percent of its workforce, cutting costs

Tesla eliminates 9 percent of its workforce, cutting costs

Tesla said the more than 3,000 cuts would affect mostly salaried employees, excluding workers producing its cars.

Tesla is cutting around nine percent of its workforce as part of "restructuring" moves to reduce costs - but company founder Elon Musk has insisted the move will not affect its ability to reach Model 3 production targets.

Elon Musk, Tesla's chairman, said on Twitter that the job cuts were "difficult, but necessary". Musk wants to flatten the management structure at the company to make it less bureaucratic.

In an email obtained by CNBC, Tesla CEO Elon Musk said the company has not "made an annual profit in the nearly 15 years since" it was founded. According to Bloomberg, this is the largest layoff in Tesla's 15-year history. I also want to emphasize that we are making this hard decision now so that we never have to do this again. In the letter, Musk states that a "comprehensive organizational restructuring" is underway but won't impact production workers.

Tesla is reportedly planning to lay off approximately 4,100 of its 46,000 employees to cut costs. His company began to roll out Tesla-branded selling spaces at 800 Home Depot locations earlier this year, building on a previous relationship the retailer had with SolarCity Corp., which Tesla acquired in 2016.

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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's first two major vehicles sell for around £56,000, but the new model will be much cheaper, with prices starting from around £26,000.

The company added that its rapid growth over the past several years has resulted in some duplication of roles and job functions.

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.

To those who are departing, thank you for everything you have done for Tesla and we wish you well in your future opportunities.


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