Tesla undecimates its workforce but Elon insists everything's absolutely fine

Andrew Cummings
June 12, 2018

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

Tesla has been under increasing pressure in recent months over its slow rollout of the Model 3 - which is meant to be Tesla's mainstream market offering.

As described previously, we are conducting a comprehensive organizational restructuring across our whole company.

On Tuesday, Musk tweeted that the company will cut 9 percent of its workforce as part of the restructuring and to "become profitable". That is a valid and fair criticism of Tesla's history to date. Moreover, he said that this round of layoffs is necessary so that "we never have to do this again".

While that email was sent only to employees, Musk then tweeted the full text immediately afterwards and it is clear that the missive was created to be read by external critics and anxious investors.

According to sources familiar with the matter, there was a round of layoffs at Tesla that started on Monday and it is going to be made official by Tesla CEO Elon Musk today. The company would also end its residential sales agreement with Home Depot to sell more solar panels and battery storage in Tesla stores and online.

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 is very hard to say goodbye", the CEO wrote.

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. Yet, despite our tiny size, Tesla has already played a major role in moving the auto industry towards sustainable electric transport and moving the energy industry towards sustainable power generation and storage.

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