Tesla laying off 9 percent of workforce

CEO Musk says the cuts won't hurt Tesla's ability to ramp up Model 3 production.

Jake Holmes Reviews Editor
While studying traditional news journalism in college, Jake realized he was smitten by all things automotive and wound up with an internship at Car and Driver. That led to a career writing news, review and feature stories about all things automotive at Automobile Magazine, most recently at Motor1. When he's not driving, fixing or talking about cars, he's most often found on a bicycle.
Jake Holmes
2 min read
Tesla Model 3 Long Range

Tesla aims to build 3,500 Model 3 sedans per week by the end of this month.

Tim Stevens/Roadshow

Tesla will lay off 9 percent of its workforce as it works to reach profitability. Bloomberg reported the news, and CEO Elon Musk then shared his memo to Tesla staff on Twitter. Musk said the decision was made as the automaker works to become profitable. Tesla has never been profitable in its 15-year existence.

Musk said that the layoffs do not affect production staff and stressed that this wouldn't hurt the company's efforts to hit big targets for production of the Model 3 sedan. Instead, he said that the cuts were made to job functions that, "are difficult to justify today." Moreover, he said that this round of layoffs is necessary so that "we never have to do this again."

"Profit is obviously not what motivates us," Musk wrote. "What drives us is our mission to accelerate the world's transition to clean, sustainable energy, but we will never achieve that mission unless we eventually demonstrate that we can be sustainably profitable."

During Tesla's Q1 earnings conference call at the beginning of May, Musk had said Tesla would hit profitability in Q3 of this year, with the goal of building 5,000 Model 3s per week within two months' time. At the recent Tesla shareholder meeting last week, Musk promised Tesla was on track to produce 3,500 Model 3s per week by the end of this month. Shareholders also elected to keep Musk on as chairman of the board.

Musk's letter said that Tesla will inform employees who are being let go this week, and promised "significant salary and stock vesting" to those being laid off. Tesla is also ending its residential solar sales program with Home Depot, though Musk's letter said those employees would be absorbed by other Tesla retail locations.

Tesla's Model 3 simplifies the EV

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