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Tesla lays off roughly nine percent of workforce


Tesla has laid off about nine percent of its employees, Electrek first reported. This is part of the reorganization Musk talked about in May on the companys quarterly earnings call.  The layoffs reportedly started on Monday and will be made official at some point today. Tesla, which also operates SolarCity, is only laying off salaried employees. Tesla isnt letting go any production associates, as the company is trying to ramp up Model 3 production. We made these decisions by evaluating the criticality of each position, whether certain jobs could be done more efficiently and productively, and by assessing the specific skills and abilities of each individual in the company, Tesla CEO Elon Musk wrote to employees in an email obtained by TechCrunch. As you know, we are also continuing to  flatten our management structure to help us communicate better, eliminate bureaucracy and move faster. When Tesla acquired SolarCity in 2016, its headcount increased to more than 30,000 employees. Toward the end of 2017, Tesla had around 37,000 employees. In February, Tesla made a deal with Home Depot to sell the PowerWall and solar panels at 800 of Home Depots locations. But Tesla has reportedly not renewed its contract, which means the Tesla employees working at Home Depot wont be needed anymore. Instead, Musk said in his email that they will be offered the opportunity to move over to Tesla retail locations. The hope with the restructure is to get to profitability. Last quarter, Tesla reported record revenues along with record losses.  In Q1 2018, Teslas net losses were a record $784.6 million ($4.19 per share). Heres the full email Musk wrote to staffers: As described previously, we are conducting a comprehensive organizational restructuring across our whole company. 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. 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. These cuts were almost entirely made from our salaried population and no production associates were included, so this will not affect our ability to reach Model 3 production targets in the coming months. 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. What drives us is our mission to accelerate the worlds 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 Teslas history to date. This week, we are informing those whose roles are impacted by this action. We made these decisions by evaluating the criticality of each position, whether certain jobs could be done more efficiently and productively, and by assessing the specific skills and abilities of each individual in the company. As you know, we are also continuing to  flatten our management structure to help us communicate better, eliminate bureaucracy and move faster. In addition to this company-wide restructuring, weve decided not to renew our residential sales agreement with Home Depot in order to focus our efforts on selling solar power in Tesla stores and online. The majority of Tesla employees working at Home Depot will be offered the opportunity to move over to Tesla retail locations. I would like to thank everyone who is departing Tesla for their hard work over the years. Im deeply grateful for your many contributions to our mission.  It is very difficult to say goodbye. In order to minimize the impact, Tesla is providing significant salary and stock vesting (proportionate to length of service) to those we are letting go. To be clear, Tesla will still continue to hire outstanding talent in critical roles as we move forward and there is still a significant need for additional production personnel.  I also want to emphasize that we are making this hard decision now so that we never have to do this again. To those who are departing, thank you for everything youve done for Tesla and we wish you well in your future opportunities. To those remaining, I would like to thank you in advance for the difficult job that remains ahead.  We are a small company in one of the toughest and most competitive industries on Earth, where just staying alive, let alone growing, is a form of victory (Tesla and Ford remain the only American car companies who havent gone bankrupt). 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. We must continue to drive that forward for the good of the world.   Thanks,

Tesla lays off 9% of its workforce in pursuit of profitability


( Reuters) — Electric car maker Tesla is cutting several thousand jobs across the company as it seeks to reduce costs and become profitable without endangering the critical production ramp-up for its Model 3 sedan. In an email he said had been sent to staff, billionaire Chief Executive Elon Musk said on Tuesday that the cuts were part of a simplification of Teslas management structure promised last month. 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 percent of our colleagues across the company, the email read. These cuts were almost entirely made from our salaried population and no production associates were included, so this will not affect our ability to reach Model 3 production targets in the coming months. Tesla has been trying to hit a 5,000 per week production target of its Model 3 sedans after facing initial production hiccups. Last week, Musk said the carmaker should achieve its target by the end of June. Shares rose as much as 7 percent and were last up 3.6 percent at $344.18. The layoffs mean there likely will not be more job cuts in the near-term, said Efraim Levy, analyst at CFRA Research, adding that Tesla will likely raise capital early in 2019. I dont think if Tesla becomes profitable in Q3 and Q4, that will be sustainable because of ramping up of the production. The layoffs may help them to achieve profitability in the near-term but not sustain it. Tesla has been burning through cash as it continues to spend on its assembly line and prepares for new investments on projects such as the Model Y crossover and its Gigafactory. Free cash flow, a key metric of financial health, widened to negative $1 billion in the first quarter from negative $277 million in the fourth quarter, excluding costs of systems for its solar business. Several Wall Street analysts anticipate a capital raise this year despite Musks statements that it will not be necessary due to profitability and positive cash flow in the third or fourth quarters. Tesla said it began notifying impacted workers on Tuesday and would continue to do so throughout the week. A spokesman said it would reduce overall employment back to around 37,000 — roughly in line with numbers at the end of last year. Musk also said that Tesla had decided not to renew a residential sales agreement with Home Depot (HD.N), and would focus instead on selling its solar products through its own stores and website. The company will seek to re-employ most Tesla employees at Home Depot stores at its own locations. Musk told employees in May that the company was undergoing a thorough reorganization as it contends with production problems, senior staff departures and recent crashes involving its electric cars. At the start of April, the companys 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 Model 3 cars have wiped out almost all of this years losses.