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Tesla Lays off 9 Percent of its Workforce

The layoffs will not affect Tesla’s production capabilities as the employees being let go are from its salaried white-collar workforce, not its plant workers.

Lee Bailie By: Lee Bailie June 15, 2018
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In an effort to become profitable, and amid production issues that have plagued the rollout of the Model 3 sedan, Tesla Inc. announced it is laying off 3,600 workers which represent about 9 percent of its workforce.

The layoffs will not affect Tesla’s production capabilities as the employees being let go are from its salaried white-collar workforce, not its plant workers.

This round of job cuts is Tesla’s largest in its 15 years of operation, but not its first as it laid off several hundred workers last fall and a smaller number in 2008, according to a report from Global News.

According to an email written by Tesla CEO Elon Musk to company staff and obtained by CNN Money, this round of cuts is designed to reduce duplication.

“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 email reads in part, according to CNN Money.

Tesla hasn’t confirmed how much money the layoffs would save, but Musk stated at the company’s shareholder meeting earlier this month that he expects Tesla to produce a profit in Q3 2018 (July-September). As Global News notes, Tesla has yet to produce an annual profit and has posted just two profitable quarters in 15 years.

As for the Model 3, Tesla still aims to produce 5,000 units a week by the end of June.

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