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Tesla Says Upcoming Layoffs Won't Hurt Model 3 Production

Tesla Says Upcoming Layoffs Won't Hurt Model 3 Production

Tesla is about to undergo massive layoffs, but CEO Elon Musk says that Model 3 production remains the company’s top priority.

In an email sent Tuesday, Tesla CEO Elon Musk advised both his company and the world that the electric carmaker was about to perform their biggest round of layoffs ever. Around 3,000 jobs are scheduled to be terminated, or about nine percent of Tesla’s total workforce.

Musk posted the letter sent to every Tesla employee to his Twitter account on Tuesday morning.

As Musk notes in his email, Tesla has never turned an annual profit, and while profit isn’t what motivates the company, he acknowledges it as a necessity in order for Tesla to achieve their real goal of transitioning the world to sustainable energy practices. Tesla can’t bring about the green energy revolution if it cannot sustain itself, so profitability is now a priority for the company.

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It's not the top priority, however. Production of the high-volume Model 3 sedan is still the golden ticket to Tesla’s continuing profitability and Musk knows it. None of the layoffs scheduled affect Model 3 production associates in any way, and all job terminations instead affect salaried workers.

Tesla
via The Verge

In his email, Musk notes that Tesla is undergoing a company-wide restructuring by flattening their management tiers and eliminating bureaucracy.

Buried in Musk’s email is another point on Tesla’s plans for Home Depot and their solar panel sales. Rather than sell via the larger home improvement big-box store, Tesla will bring their employees home to sell from their own retail sites.

Tesla is under increasing pressure from investors to achieve profitability. Bloomberg notes that the company has burned $5.4 billion in cash over the years, with most of that cash coming from loans and debts as the company continues its rapid expansion. Tesla will require even more billions of dollars to continue their battery plant expansion in both Europe and China, as well as to fund their automotive expansion back home.

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