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Tesla sacks 9% of its workforce: Elon Musk announces major job losses

Auto Express logo Auto Express 12/06/2018 Hugog
Tesla CEO Elon Musk. © REUTERS/Beck Diefenbach Tesla CEO Elon Musk.

Tesla is to let go approximately nine per cent of its workforce, after the company’s chief executive officer, Elon Musk, said it needs to “reduce costs and become profitable”.

Musk said jobs would be lost from Tesla’s “salaried population”, but promised “no production associates” will be let go. In an email released by Musk on Twitter, the Tesla co-founder said the cuts will “not affect our ability to meet Model 3  production targets in the coming months."

Blaming “some duplication of roles and job functions” that have emerged as the company has expanded, Musk said Tesla would be “evaluating the criticality” of each position, “assessing the specific skills and abilities of each individual in the company”. Tesla will, however, continue to take on new staff, as a “significant need for additional production personnel” remains within the company.

Tesla Model 3 - front action © David Bush Tesla Model 3 - front action Tesla has been dogged with delays surrounding delivery of its all-electric BMW 3 Series-rivalling Model 3 saloon, but continues to push ahead with future products such as the Tesla Semi truck, the new Roadster and an EV alternative the Volkswagen Golf, which Musk alluded to at the company’s recent shareholder meeting.

Musk’s statement addressed the fact that Tesla “has never made a profit in the almost 15 years” since the company was founded, but highlighted that, along with Ford, it is the only US car company to never have been declared bankrupt.

The company would, he continued, “never achieve” its mission to “accelerate the transition to sustainable, clean energy” unless Tesla is able to “eventually demonstrate that we can be sustainably profitable”.

© Bloomberg

Affected staff will be informed this week of their job losses, with Musk promising they would receive “significant salary and stock vesting” linked to their length of service. The company will also not renew its contract with US hardware chain Home Depot, which currently sells the company’s solar panels and home energy systems, though “the majority” of Tesla staff currently placed in Home Depot stores will move over to Tesla retail positions.

Musk thanked departing staff for their service, saying the company was “making this hard decision now so that we never have to do this again”; he also promised Tesla would “continue to flatten” its management structure.

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