Published: Tue, June 12, 2018
Business | By Kate Woods

Tesla cuts 9 percent of workforce in search for profit

Tesla cuts 9 percent of workforce in search for profit

Tesla will lay off 9 percent of its workforce as it works to reach profitability.

Last month, Tesla CEO Elon Musk announced a vague plan to "restructure" the company in order to achieve profitability during the second half of the year.

Tesla Inc (TSLA.O) is cutting several thousand jobs across the company as it seeks to reduce costs and become sustainably profitable without endangering the critical ramp up of production of its Model 3 sedan.

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"Given that Tesla has never made an annual profit in the nearly 15 years since we have existed, profit is obviously not what motivates us", he wrote in an email to employees and posted on Twitter.

"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.

USA electric auto giant Tesla is laying off nine per cent of its workforce, the company announced on Tuesday.

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In the note, which he tweeted out after it was leaked to media outlets, Musk said that almost all of the cuts would be salaried positions, and that the production staff is largely unaffected.

The move follows Tesla starting a brutal review of contractors and firing everyone that is not vouched for by an employee last month. The firm has a sector weight rating and a $300 "fair value" price target on Tesla shares, which were up about 4% in pre-market trade Tuesday.

To those who are departing, thank you for everything you've done for Tesla and we wish you well in your future opportunities. So a nine-percent cut means letting more than 3,000 workers go. 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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