Tesla to lay off 3,600 workers in effort to turn a profit

Marco Green
June 14, 2018

"As part of this effort, and the need to reduce costs and become profitable, we have made the hard decision to let go of approximately 9% of our colleagues across the company".

In an e-mail he said had been sent to staff, billionaire Chief Executive Elon Musk said on Tuesday that the cuts were part of a simplification of Tesla's management structure promised last month.

Tesla is now planning on updating its "hold the wheel" message to clarify that drivers need to apply slight upward or downward pressure to let the system know that they're engaged, according to a tweet by Tesla CEO Elon Musk.

Musk said that the job cuts are part of Tesla's restructuring process.

It could be a signal to employees and Wall Street that he's still optimistic about the future of Tesla.

What Musk is hoping to achieve with the $25 million gambit is yet unknown.

"What drives us is our mission to accelerate the world's transition to sustainable, clean energy, but we will never achieve that mission unless we eventually demonstrate that we can be sustainably profitable", Musk wrote.

"The company will pull out all the stops, it will do a lot of one-time items, we believe, to show a GAAP profit in the third quarter".

The layoffs come in engineering, sales and other front-office functions, but the company says the remaining workforce is large enough to accomplish Musk's lofty goals of rolling out a semi, pickup truck and a new SUV in the coming years. The company will seek to re-employ most Tesla employees at Home Depot stores at its own locations.

He wrote that reaching Musk's Model 3 production goal of 5,000 vehicles per week by the end of June is still the primary driver of profitability.

The Model 3 starts at $35,000, but lower-priced configurations are not available yet.

Other reports by Click Lancashire

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