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Tesla to cut 9% of its workforce in a bid to chase profits

Tesla to cut 9% of its workforce in a bid to chase profits

12th July 2018

In an attempt to lessen the blow of a leaked email, Elon Musk took to Twitter and addressed the fact that Tesla are set to reduce their current workforce by 9%. The “difficult but necessary” move will see over three thousand employees lose their jobs.

This news comes as somewhat of a shock for the company that has astonishingly not yet made any profit.

“Given that Tesla has never made an annual profit in the almost 15 years since we have existed, profit is obviously not what motivates us. 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.”

The news was apparently a personal blow to Musk who took the opportunity to thank those who would be losing their jobs and made a promise to compensate those leaving with salary and stock vesting, which would no doubt go some way to those losing their jobs as off the back of the announcement Tesla’s stock rose by 3.2%

Mr. Musk also announced that as part of the company-wide restructuring process they would “flatten” their management structure to “eliminate bureaucracy and move faster.”

The cull affects salaried staff across the business who had been taken on at a time where the business needs were different and in many cases positions have now been found to be duplicated across the company. However, Mr. Musk went on to clarify that talent sourcing would continue as the company moved forward and essential roles would continue to be filled.

Tesla to cut 9% of its workforce in a bid to chase profits

Tesla have been plagued by production delays in the anticipated upcoming Model 3, and Elon Musk’s press release took the opportunity to reassure investors and customers alike stating that the redundancies will not affect their production associates and therefore model 3 production is unaffected.

The company have also decided not to renew a residential sales deal with Home Depot, instead concentrating on selling their solar power products in Tesla stores and online. This Mr. Musk stated would give the existing Tesla employees the opportunity to move from Home Depot to Tesla’s retail stores. However presumably, this will have an impact on those who are unable to relocate.

The future of the company, for now, may seem uncertain however the entrepreneur remains positive despite adversity reminding readers of his email;

“we are a small company in one of the toughest and most competitive industries on Earth, where just staying alive, let alone growing, is a form of victory (Tesla and Ford remain the only American car companies who haven’t gone bankrupt)”

This news comes as another of Elon Musk’s companies The Boring Company hits the headlines as their novelty “Not-a-Flamethrower” has been dispatched finally to continued controversy.

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