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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 thousands of workers as part of a ‘company-wide restructuring’


Tesla has laid off about 9 percent of its employees as part of a company-wide restructuring, according to an email sent to staff by CEO Elon Musk this morning. The cuts, which account for more than 3,000 jobs, will not affect the companys continued effort to ramp up production of the Model 3 sedan, Musk said. 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, Musk wrote. In order to minimize the impact, Tesla is providing significant salary and stock investing (proportionate to the length of service) to those we are letting go. Tesla has recently faced pressure from its investors to ramp up production of the Model 3. The company had $2.6 billion in cash at the end of the first quarter of the year, and its spending around $1 billion every quarter. While sales of the more expensive Models S and X continue to tick up each quarter, the company needs to start making money on the Model 3 if it wants to turn a profit, or it will have to borrow or raise more capital soon — something Musk has insisted the company wont do this year. 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, he wrote today. 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. The company has missed a number of deadlines for Model 3 production targets, though the CEO said at last weeks annual shareholder meeting that Tesla is now making 500 per day, or about 3,500 per week. Tesla is trying to get to a rate of 6,000 Model 3s per week by the middle of the year, at which point it will break even on each car it turns out, according to the companys most recent earnings report. Musk first signaled that a reorganization of the companys structure was coming in an April email to Tesla staff. In it, he wrote about how unnecessary expenses, excessive meetings, poor communication, and a Russian nesting doll series of contractors who never want to end the money train were hampering the companys progress toward meeting his ambitious goals. Difficult, but necessary Tesla reorg underway. My email to the company has already leaked to media. Here it is unfiltered: In a subsequent May email, Musk announced he was flattening Teslas management structure. That followed news that the companys chief engineer was taking a leave of absence and the departure of Teslas government safety liaison. Later in the month, Tesla announced a handful of new hires at the director and executive level, some coming from companies like Apple and Amazon. The new round of layoffs will not affect Teslas recent efforts to hire more employees to shore up production of the Model 3, Musk said in todays email. [T]here is still a significant need for additional production personnel, he wrote. I also want to emphasize that we are making this hard decision now so that we never have to do this again. In April, Musk asked employees to refer anyone you know who you think meets the Tesla bar for talent, drive and trust so that the company could produce its newest electric car around the clock. The push to make more Model 3s, which Musk has referred to as production hell, has faced scrutiny from a number of parties inside and outside of the company. This week, Teslas former director of environmental, health, safety, and sustainability filed a lawsuit claiming he was wrongfully terminated for calling out unreported injuries at the companys Fremont assembly factory. (Tesla says the former director was fired after the company received an onslaught of complaints about his behavior in the workplace.) In an April report from the nonprofit news organization Reveal, five former members of that same team made similar claims about how Tesla allegedly didnt properly report workplace injuries. A recent CNBC report detailed a number of previously undisclosed fires at the companys paint shop. This is the most excruciating, hellish several months that Ive ever had, Musk said at the recent shareholder meeting. In his email to employees, Musk also announced that Tesla will discontinue a recently announced initiative to sell its home energy generation and storage products at Home Depot. The majority of Tesla employees working at Home Depot will be offered the opportunity to move over to Tesla retail locations, he wrote. Correction: This article previously misquoted part of Musks email. Musk said there was valid and fair criticism, not valid unfair criticism. It has been updated to reflect this change.