Tesla confirms layoffs as part of ‘difficult but necessary’ reorg
Tesla CEO Elon Musk has confirmed media reports that the carmaker is to cut 9% of its staff as part of a “difficult, but necessary reorganisation” to reduce costs and become profitable.
Announced in a tweet that pointed to a leaked internal email, the move would only affect salaried staff, with no production associates included, and Musk said it would not affect the firm’s ability to reach Model 3 production targets in the coming months.
He went on to say: “What drives us is our mission to accelerate the world’s transition to sustainable, clean energy, but we will never achieve that mission unless we eventually demonstrate that we can be sustainably profitable.”
The reduction comes after rapid personnel growth for the carmaker over recent years – the email said that such growth had “resulted in some duplication of roles and some job functions that, while they made sense in the past, are difficult to justify today”. The reductions will still mean the global headcount will be larger than it was at the beginning of 2018. The company is also looking at some type of a reorganisation restructuring this month.
Musk thanked those employees hit by the redundancies for their work, and added: “To those remaining, I would like to thank you in advance for the difficult job that remains ahead. 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 and Ford remain the only American car companies who haven’t gone bankrupt).”
Musk has also said Tesla is expected to be profitable and cashflow positive in the third quarter. The company is also expected to make headway on production targets this month for its Model 3 after coming under fire recently.For more of the latest industry news, click here.