News - Tesla
Tesla announces nine per cent workforce cut
CEO Elon Musk announces nine per cent Tesla staff cut to enable profitability
13 Jun 2018
TESLA CEO Elon Musk has announced on Twitter that the American EV specialist will cut its workforce by approximately nine per cent in an effort to make the company profitable.
Mr Musk posted a company-wide email on Twitter that details the need for “a comprehensive organisational restructuring across (the) whole company”, that will eliminate job roles that have become duplicated or redundant over time.
According to the email, the cuts have been made exclusively from Tesla’s salaried employees and not its production associates, meaning the cuts should not affect upcoming production targets for the hotly anticipated Model 3 sedan.
Tesla will assess what jobs are to be made redundant by evaluating the importance of each position, whether jobs could be done more efficiently and productively, and detailing the specific skills and abilities of each individual in the company.
At the end of 2017 Tesla employed 37,543 staff, which would translate to approximately 3379 jobs lost, if staff numbers remained the same as the 2017 numbers.
Mr Musk said the company would be providing terminated employees with “significant” salary and stock vesting, proportionate to the employees’ length of service.
The company will also not renew its partnership with American hardware chain Home Depot, through which Tesla had set up an arrangement to sell its solar panel roof tiles in 800 locations, according to American publication Automotive News.
Sales of the solar tiles will be moved to Tesla retail locations and online, with the “majority” of Tesla employees to be offered the chance to work at a Tesla retail store.
Mr Musk stressed that the company will continue to hire talent in critical roles and that there was still a need for additional production personnel.
Tesla’s management structure will also be altered to reduce red tape and bureaucracy and help the company come to decisions faster.
In the 15 years that Tesla has existed as a company, it has never once turned an annual profit. Mr Musk said that proving the company can be profitable was a necessary step to achieving its goals of shifting the automotive focus to electrified powertrains.
Musk announced at a shareholder meeting in California earlier this month that it is set to finally produce up to 5000 examples of the Model 3 sedan per week, potentially by the end of the month.
He also claimed that the Model 3 was the best-selling premium medium sedan in the US last month, trumping the likes of the Mercedes-Benz C-Class, BMW 3 Series and Audi A4.
Right-hand-drive examples of the Model 3 are expected to arrive in Australia next year.
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