Tesla slides after report says it plans to cut 3,000 jobs (TSLA)

Mae Love
June 13, 2018

Musk's memo, which was sent to all employees, also announced that the company was cutting 9% of its total workforce as part of a reorganization created to reduce costs and help the electric automaker become profitable.

Tweeting pictures of an email he said had been leaked to media, Musk said that the cuts were part of a simplification of Tesla's management structure promised last month.

"Given that Tesla has never made an annual profit in the nearly 15 years since we have existed, profit is obviously not what motivates us", Musk wrote in the internal memo announcing the job cuts. "What drives us is our mission to accelerate the world's transition to clean, sustainable energy, but we will never achieve that mission unless we eventually demonstrate that we can be sustainably profitable". For almost all of its history, Tesla has put up losses while investing heavily in technology, manufacturing plants and an extensive car-charging network.

Last week, Musk said it's "quite likely" that Tesla will reach its goal of building 5,000 Model 3 cars per week by the end of the month.

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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.

Tesla has grown rapidly, increasing headcount by more than 15% since the start of the year, according to a company spokesman, so the cuts will leave the headcount higher than it was at the beginning of the year.

Just a day before Tesla announced it was exiting Home Depot stores, managers were instructed to have employees in the home energy team, specifically those who worked at these kiosks in Home Depot, complete a two-hour training on Tesla vehicles and then pass a test on that material by midnight, the employee told Fortune. "I'm deeply grateful for your many contributions to our mission".

"One of the biggest mistakes we made was trying to automate things that are super easy for a person to do, but super hard for a robot to do", he said. He added that affected employees will receive "significant salary and stock vesting", proportionate to the time they spent at the company. That makes these layoffs much more significant than the hundreds of workers Tesla fired last fall.

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