Tesla to Cut Workforce by 7%
2019-01-28 14:51 Monday
Elon Musk, Tesla's CEO acknowledged that the automaker will cut its full-time staff by nearly 7% in the near future. The auto giant began implementing cost-cutting measures recently to reduce the cost of its products and boost profit margin. In an email to employees, Musk said the company faces a "very difficult" road ahead in its long-term goal to sell affordable renewable energy products, noting the company is younger than other players in the industry.
"Tesla will need to make these cuts while increasing the Model 3 production rate and making many manufacturing engineering improvements in the coming months. Attempting to build affordable clean energy products at scale necessarily requires extreme effort and relentless creativity, but succeeding in our mission is essential to ensure that the future is good." Musk said. He also added that Tesla faces "an extremely difficult challenge" in making its electric vehicles and solar products a competitive alternative to traditional vehicles and energy products that rely on fossil fuels.
The cheapest version of Tesla's Model 3 costs $44,000, and the company is looking to release a $35,000 version. In December, Musk contended that Tesla is not far from being able to produce the $35,000 car, which would probably be ready in about five or six months.
The company disappointed investors earlier this year after it announced that it had delivered 90,700 vehicles in the fourth quarter, which falls short of its previous sales target. The automaker has faced substantial pressure from competitors within the industry, including Ford, Nissan and General Motors, which are speeding up their investments in the EV space.
The exact number of employees who will be laid yet has not yet been disclosed. However, according to Tesla's website, the company has a total of 45,000 employees, which means that the layoffs could be in excess of 3,000.