Economy

Tesla laying off 9 percent of workforce

Tesla laying off 9 percent of workforce”

The layoffs at Elon Musk's electric vehicle company come as it tries to increase production of its Model 3 sedan and turn a quarterly profit this year.

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

The cuts come as the company aims to shrink costs and become profitable, Musk said.

"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", Musk wrote.

Tesla is cutting 9% of its workers as part of a reorganization created to reduce costs and help the electric automaker become profitable, according to an email CEO Elon Musk sent to employees Tuesday and obtained by Fortune.

Musk said that the layoffs do not affect production staff and stressed that this wouldn't hurt the company's efforts to hit big targets for production of the Model 3 sedan.

Tesla has never been profitable in its 15-year existence.

Last week, Musk overcame an attempt to strip him of his role as chairman of Tesla's board, a plan introduced by a company shareholder who raised doubts about Musk's ability to manage multiple companies simultaneously.

Tesla told CBC News that it had over 42,000 employees around the world. Moreover, he said that this round of layoffs is necessary so that "we never have to do this again".

Tesla employees based at US DIY chain Home Depot and involved with the home solar business Tesla acquired when it bought SolarCity are among those affected, he said. For almost all of its history, Tesla has put up losses while investing heavily in technology, manufacturing plants and an extensive car-charging network. The company let go of 400 to 700 workers last fall after completing annual performance reviews, and it laid off a small number of workers back in 2008. Musk also has talked about a restructuring of its production line, after failing to meet Model 3 goals.



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