Tesla to Slash 9% of Employees, None from Production

Cars and Drivers

Published: June 12, 2018 3:12 pm

Last Updated: January 11, 2020 10:26 pm

In an email to employees dated Tuesday, Tesla Inc. (NASDAQ: TSLA) CEO Elon Musk announced that the company has decided to fire 9% of it current staff, “almost entirely made [up] from our salaried population and no production associates were included.”

Musk went on to say that production staff are being left alone in order avoid a negative effect on “[Tesla’s] ability to reach Model 3 production targets in the coming months. The first target is weekly production of 5,000 Model 3 sedans by the end of June.

Before this morning’s announcement, Tesla employed about 46,000 workers, some 8,000 of whom have joined the company since the beginning of the year. Given the company’s target reduction about 4,100 employees stand to lose their jobs.

Musk noted that the company has never made a profit in the nearly 15 years of its existence. That indicates, he said, that “profit is obviously not what motivates us.” He goes on:

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. That is a valid and fair criticism of Tesla’s history to date.

In addition to the firings, Tesla said it will not renew its efforts to sell residential solar power systems in Home Depot stores. The “majority” of Tesla employees working in Home Depot stores will be offered positions in other Tesla retail locations.

The memo continues:

To be clear, Tesla will still continue to hire outstanding talent in critical roles as we move forward and there is still a significant need for additional production personnel. I also want to emphasize that we are making this hard decision now so that we never have to do this again.

The full memo is available from this Musk tweet:

Difficult, but necessary Tesla reorg underway. My email to the company has already leaked to media. Here it is unfiltered: pic.twitter.com/4LToWoxScx

— Elon Musk (@elonmusk) June 12, 2018

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