Tesla chief executive Elon Musk has announced that the electric car firm is cutting 9% of of its more than 40,000-strong workforce in a bid to “become profitable”.
In an internal memo that he later posted on his Twitter account, the South African-born billionaire said that the “difficult but necessary” move was necessary to tackle the “duplication of roles” resulting from the firm’s rapid expansion.
Musk admitted that Tesla “has never made a profit in almost 15 years”. Tesla is driven by finding solutions to “clean” energy, rather than profits, he continued, but the firm will “never achieve that mission unless we eventually demonstrate that we can be sustainably profitable”.
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According to The Guardian, the more than 3,500 jobs cut will be centred on “salaried” roles, rather than factory work.
The restructuring should not affect production of the company’s Model 3 budget EV, which has been plagued by manufacturing woes since launching in last July, the newspaper reports.
Michelle Krebs, an analyst at online vehicle trading platform Autotrader, told the BBC that the job cuts did not come as a surprise to many in the industry.
“It is clear that Tesla is under tremendous pressure to finally turn a profit and is attempting to address it by cutting overhead,” she said. “Also notable is [that] Tesla is not cutting production jobs at a time when pushing Model 3s out the door is a top priority.”
Although Tesla has yet to reach profitability, it hasn’t stopped the electric car from pushing ahead with a host of new models, Autocar notes.
These new cars include a performance variant of the Model 3, a Bugatti Chiron-rivalling Roadster sports car and a compact SUV dubbed the Model Y.
