Tesla cuts 9 percent of workforce in search for profit

Tesla cuts 9 percent of workforce in search for profit

Tesla would not say how much money the layoffs would save, but said no factory workers would be affected as the company continues to ramp up production of its lower-priced Model 3 compact auto.

Tesla's announcement comes a month after Musk announced a restructuring of Tesla's organizational chart.

"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, " Musk wrote in the email.

Last week, Musk overcame an attempt to strip him of his role as chairman of Tesla's board, a plan introduced by a company shareholder who raised doubts about Musk's ability to manage multiple companies simultaneously.

Musk in the email thanked the employees leaving the company and said the individuals will receive compensation. Year-to-date, Tesla's headcount is up roughly 15%.

Musk said that the layoffs do not affect production staff and stressed that this wouldn't hurt the company's efforts to hit big targets for production of the Model 3 sedan.

"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 can eventually demonstrate that we can be sustainably profitable".

Tesla's latest annual filing last December showed it had 37,543 full-time employees.

Tesla also said it was not renewing its residential sales agreement with retailer Home Depot in order to focus on selling solar power in Tesla stores and online.

At the start of April, the company's shares had fallen by around 35 percent from a peak hit last September but signs that it is on course to meet an output target of 5,000 Model 3 cars per week have wiped out nearly all of this year's losses.

"9 percent job cut is a good number and I don't think there will be more job cuts in the near term", Efraim Levy, analyst at CFRA Research said.

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