Tesla cuts 9 percent of workforce in search for profit

Seeing Tesla Improving Production Rate: Keybank

Tesla is laying off ‘about 9%’ of its workforce as it ‘restructures’ the company

The email then shifts in tone and notes that the cuts will not impact the company's delayed production schedule for its latest auto model: "These cuts were nearly entirely made form our salaried population and no production associates were included, so this will not affect our ability to reach Model 3 production targets in the coming months".

The move is part of an organizational restructuring that Musk announced earlier in the year.

The cutbacks come at a time when Chief Executive Elon Musk has said Tesla would be profitable in the third and fourth quarters.

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

This is part of the reorganization Musk talked about in May on the company's quarterly earnings call. The firm has a sector weight rating and a $300 "fair value" price target on Tesla shares, which were up about 4% in pre-market trade Tuesday. So a nine-percent cut means letting more than 3,000 workers go. Moreover, he said that this round of layoffs is necessary so that "we never have to do this again". Tesla still has a significant need for production workers as it tries to reach Model 3 manufacturing targets, he wrote in the email.

It is worth noting that the email also comes following several weeks of press reports outlining the vehicle company's troubles and predicting exactly what has happened - the need to cut costs while keeping production moving as fast as possible.

Tesla's workforce has grown at an incredible pace since the acquisition of SolarCity, which pushed Tesla's total headcount to over 30,000 employees.

It will instead "focus our efforts on selling solar power in Tesla stores and online", he said.

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". Musk also has talked about a restructuring of its production line, after failing to meet Model 3 goals. It can easily top $50,000 with options.

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