Tesla to lay off 9% of staff; cuts will not affect Model 3

AFP NEW YORK (AFP-Jiji) — Electric carmaker Tesla Motors announced Tuesday it was cutting 9 percent of its workforce to enhance profitability, but said the move would not affect an ambitious production ramp-up of its Model 3 sedan.

The job cuts are part of a company-wide restructuring to address excess staff in some areas due to the company’s speedy growth, Tesla chief Elon Musk said in an email to employees.

The cuts concern salaried staff but not production workers and will not affect Model 3 output targets, said Musk, who characterized the downsizing as an acknowledgement of the need to focus more on costs.

“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,” Musk said in the message.

“What drives us is our mission to accelerate the world’s transition to sustainable, clean energy, but we will never achieve that mission unless we eventually demonstrate that we can be sustainably profitable,” Musk added. “That is a valid and fair criticism of Tesla’s history to date.”

The layoff affects almost 4,000 workers, based on figures supplies by the company. Musk said last month that the company would conduct a “sort of reorganization,” but did not discuss specifics.

Musk said Tuesday the company would continue to hire for critical roles and that finding additional production staff remained a priority.

Musk said on Twitter that the decision to cut jobs was “difficult but necessary.”

The Tesla chief has at times clashed with Wall Street analysts over an aggressive cash burn rate that has fed skepticism over whether the company can reach its goals after the company earlier missed several key benchmarks for the Model 3.

Just six weeks ago, Musk was in the doghouse with many Wall Street analysts after he abruptly cut off an earnings conference call because of “dry” and “bonehead” questions that dug into capital spending details.

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