Tesla to lay off 9% of workers as part of restructuring plan


"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.

Last month Mr Musk said the company was planning a wide-ranging reorganisation that would flatten its management structure. Toward the end of 2017, Tesla had around 37,000 employees.

Musk stressed in the email to employees that the cuts will not affect its ability to reach Model 3 production targets in the coming months. Employees told the paper that they received "little or no warnings" before the firings, which reportedly targeted 400 to 700 employees, leading to "lowered morale through many departments".

Tesla has not made an annual profit in its 15 years of doing business, and it has posted only two quarterly net profits.

Tesla is cutting nine percent of its workforce in an effort to achieve profitability, CEO Elon Musk announced in a note sent to employees that elaborated on a planned restructuring he publically announced in May.

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.

"These cuts were nearly entirely made from 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", Musk tweeted.

The company is making the move now so it never has to do it again, he wrote.

To those who are departing, thank you for everything you've done for Tesla and we wish you well in your future opportunities.

"9 percent job cut is a good number and I don't think there will be more job cuts in the near term", Efraim Levy, analyst at CFRA Research said. We must continue to drive that forward for the good of the world.