Tesla lays off 9% of workforce

Source: David Ferris, E&E News reporter • Posted: Thursday, June 14, 2018

Tesla Inc.’s founder, Elon Musk, announced yesterday that the company would shed about 9 percent of its employees as it tries to become a moneymaking company for the first time.

No production employees are being let go, he said, adding that Tesla is still hiring for manufacturing jobs. Production is urgent for Tesla because it is struggling to make timely deliveries of the new Model 3, a speedy electric sedan intended as its first mass-market vehicle.

Tesla has about 37,000 employees after several years of torrid growth.

Investors have been growing louder in their desire for a profit, which Tesla has never turned in its 15 years. Musk promised in April that profits would arrive by the third or fourth quarter, a difficult proposition as Tesla burns through mountains of cash building out its auto factory in California and its battery “gigafactory” in Nevada.

Tesla’s stock spiked on today’s news, then ended the day almost where it started, at almost $343 a share.

Musk released the companywide email via Twitterafter it was leaked to media outlets.

In the note, he also announced the company would stop selling its solar products at Home Depot and bring them in-store. Tesla is one of the biggest rooftop solar installers in the country and is rolling out a solar panel that resembles roof shingles.

Musk characterized the layoffs as a bid for efficiency.

“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 difficult to justify today,” he wrote.

Tesla has built a fiercely loyal fan base by portraying itself as not just a company, but the builder of an end-to-end system of clean energy and transport. Those fans seemed unfazed by the prospect of layoffs.

The hundreds of replies to Musk’s tweet trended positive. One respondent, who said he was a layoff victim, said, “I don’t regret giving all I had and in a way bidding adieu is my last contribution. I’ll be cheering Tesla on knowing I did my part.”

In his email, Musk said with his typical optimism that layoffs might be behind it for good.

“I also want to emphasize that we are making this hard decision now so that we never have to do this again,” he wrote.