Tesla boss Elon Musk has confirmed the company is cutting nine per cent of its workforce as it grapples with losses running to hundreds of millions of dollars in the first quarter of 2018.
The electric carmaker employs an estimated 37,000 workers, meaning around 3,300 of them will be axed in what the firm calls a “comprehensive organisational restructuring” initiative.
According to a leaked email, which was later tweeted by Musk, “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."
The cuts come at a time when Tesla and Musk himself are under huge scrutiny after the firm posted a net loss of $709.6m in the first quarter of the year, amid more delays in production of the Model 3.
“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,” Musk wrote. “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.”
But don’t Tesla need all of the manpower they can get?
Yes, amid a raft of production and financial woes the company needs to be making and selling new cars as quickly as possible, but Musk insisted Model 3 production targets will be unaffected by the layoffs.
He said: “These cuts were almost entirely made from our salaried population and no production associates were included, so this will not affect our ability too reach Model 3 production targets in the coming months.”