INSUBCONTINENT EXCLUSIVE:
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 company 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 isn&t letting go any production associates, as the company is trying to ramp up Model 3 production.
&We made these decisions
byevaluating the criticality of each position, whether certain jobs could be done more efficiently and productively, and byassessing 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 toflatten 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 Depot locations
But Tesla has reportedly not renewed its contract, which means the Tesla employees working at Home Depot won&t 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, Tesla net losses were a record $784.6 million ($4.19 per
share).
Here the full email Musk wrote to staffers:
As described previously, we areconductinga comprehensive organizational restructuring
Tesla has grown and evolved rapidly over thepastseveral years,which has resulted in some duplication ofroles 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
Thesecuts were almostentirely made from our salaried population and no production associates were included, so this will not affectour
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 world 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 Tesla history to date.
This week, we are informing those whose roles are impacted by this action
We made these decisions byevaluating the criticality of each position, whether certain jobs could be done more efficiently and productively,
and byassessing the specific skills and abilities of each individual in the company
As you know, we are also continuing toflatten our management structure to help us communicate better, eliminate bureaucracy and move
faster.
In addition to this company-wide restructuring, we&ve decided not to renew our residential sales agreement withHome 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
I&m deeply grateful for yourmanycontributions to our mission.Itis very difficult to saygoodbye
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 stillcontinue to hire outstanding talent in critical roles as we moveforward 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 wenever have
to do this again.
To those who are departing, thank you for everything you&ve done for Tesla and we wish you well in your future
To those remaining, I would like to thank youin 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 haven&t 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,
Elon
