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Tesla Slashes Nine Percent of Workforce

Model 3 production not affected

Tesla has dropped around nine percent of its workforce as part of a restructuring plan, CEO Elon Musk revealed on Twitter today. Production of the Model 3 will not be affected by the cuts.

"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 difficult to justify today," Musk said in a company email which he later posted on Twitter. "As part of this effort, and the need to reduce costs and become profitable, we have made the difficult decision to let go of approximately 9% of our colleagues across the company."

The email says almost all of the workers cut were salaried. No production associates were included, which means we won't see disruptions to operations surrounding the Model 3. The automaker is working to boost production of the entry-level sedan after missing targets for the first quarter of the year. By the end of the second quarter, Tesla hopes to be making 5,000 copies a week.

Tesla has never turned an annual profit since it was first established almost 15 years ago. Musk acknowledges this fact in an email, adding, "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."

Tesla had 37,543 employees in its ranks by the end of last year, more than 12 times its workforce five years earlier, as the Los Angeles Times points out. Tesla also lost nearly $2 billion last year.

Amid the news, Tesla's stock fell today. Although it had increased 6.9 percent earlier in the day, shares were up just 2.6 percent after the announcement.

Source: Tesla, Los Angeles Times, CNBC