Tesla cutting 9% of jobs - Elon Musk

Seeing Tesla Improving Production Rate: Keybank

Electric vehicle maker Tesla Inc.is laying off about 3,600 white-collar workers as it slashes costs in an effort to become profitable.

Tesla is laying off around 9-percent of its workforce, according to insiders.

As of Tesla's annual filing in December, the automaker had 37,543 full-time employees.

In his email to employees, Musk also said the company would stop selling its solar panel units at Home Depot to better focus on sales on its own stores and website. He argued that cost cutting was necessary to turn Tesla into a sustainably profitable company. In an email released by Musk on Twitter, the Tesla co-founder said the cuts will "not affect our ability to meet Model 3 production targets in the coming months".

The company added that its rapid growth over the past several years has resulted in some duplication of roles and job functions. The company will also not renew its contract with U.S. hardware chain Home Depot, which now sells the company's solar panels and home energy systems, though "the majority" of Tesla staff now placed in Home Depot stores will move over to Tesla retail positions. But Musk has promised an acceleration of Model 3 manufacturing, which will allow the company to bring in a lot more revenue.

Tesla shares pared an earlier gain of as much as 6.9 per cent and were up 3.2 per cent to US$342.81 as of 2:21 p.m.in NY trading.

Tesla has been burning cash nearly continuously since it was founded 15 years ago.

Musk's note also said that Tesla will end distribution of its solar power and home battery equipment at Home Depot and focus on direct sales instead. "It is very hard to say goodbye", the CEO wrote.

It is worth noting that the email also comes following several weeks of press reports outlining the auto company's troubles and predicting exactly what has happened - the need to cut costs while keeping production moving as fast as possible.

To those who are departing, thank you for everything you have done for Tesla and we wish you well in your future opportunities. "We must continue to drive that forward for the good of the world".



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