Tesla laying off 9 percent of workforce

  • Tesla laying off 9 percent of workforce

Tesla laying off 9 percent of workforce

"We made these decisions by evaluating the criticality of each position, whether certain jobs could be done more efficiently and productively, and by assessing the specific skills and abilities of each individual in the company", Tesla CEO Elon Musk wrote to employees in an email obtained by TechCrunch.

The move coincided with a significant jump in Tesla's stock price following a report from Keybanc Capital Markets that it increased its second-quarter production outlook for the Model 3 by 50 percent.

Tesla's announcement comes a month after Musk announced a restructuring of Tesla's organizational chart.

"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", the message begins, in an apparent effort to claim that the cuts are not as the result of persistent problems at the company, including a massive debt pile, growing costs, significant production problems and nervous investors.

Tesla has already started to notify employees, a company spokesman said.

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

US electric vehicle giant Tesla is laying off nine per cent of its workforce, the company announced on Tuesday. That is a valid and fair criticism of Tesla's history to date. 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 auto companies who haven't gone bankrupt).

Musk said the cutbacks would not affect the company's ability to reach Model 3 production targets in the coming months.

Electrek on Tuesday also reported the company's layoffs and said the cuts began on Monday.

Up almost 7 percent earlier on Tuesday, shares of the company trimmed gains to stand 3.5 percent higher at $344 by early afternoon. The areas were to be outfitted during the first half of this year and staffed by Tesla employees to demonstrate that its panels and batteries have mainstream appeal.

Consumer Edge Research Analyst James Albertine wrote in a note to investors that he views the moves "as a positive in helping Tesla track toward profitability later this year". Each time, after a few quarters of small profits, Tesla would ramp up production of another auto model-first the Model X, then the Model 3-and rack up more big losses, as this chart from Bloomberg shows.