Tesla Lays Off White-Collar Employees, Roughly 9 Percent Of Workforce

Marcus Newton
June 13, 2018

Tesla did not say how much money the job cuts would save.

Tesla would not say how much money the layoffs would save, but said no factory workers would be affected as the company continues to ramp up production of its lower-priced Model 3 compact auto.

Musk has projected that the company could become profitable in the second half of 2018, but many remain skeptical of it achieving that goal.

Musk's statement addressed the fact that Tesla "has never made a profit in the nearly 15 years" since the company was founded, but highlighted that, along with Ford, it is the only U.S. vehicle company to never have been declared bankrupt. For almost all of its history, Tesla has put up losses while investing heavily in technology, manufacturing plants and an extensive car-charging network. Tesla also evaluated each workers' "specific skills and abilities" as part of its restructuring effort.

Excluding items, Tesla had a loss of $3.35 (£2.45) per share. The layoffs would hit about 3,800 employees, company-wide.

He noted that Tesla has never made an annual profit - a point that's often made by critics.

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Layoffs reportedly began on Monday and are expected to continue throughout the week. However, the Tesla employees now working with Home Depot will have the option to move to Tesla's own retail stores.

The Tesla-branded kiosks were created to educate consumers and ultimately generate sales of its residential rooftop solar panels and Powerwall, a battery it designed for homes that store the energy generated by solar panels. 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.

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 USA stores by the end of the year.

"We are conducting a comprehensive organizational restructuring across our whole company", Musk wrote in the memo.

Musk called the job cuts, which will affect about 9% of the company's more than 40,000 employees, "difficult, but necessary" in a tweet that contained the email he had sent to employees announcing the layoffs. "It is very hard to say goodbye", the CEO wrote.

What do you think the future holds for Tesla?

Other reports by MaliBehiribAe

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