Tesla's Workforce Haircut Takes 9 Percent Off the Top

Steph Willems
by Steph Willems
teslas workforce haircut takes 9 percent off the top

Tesla CEO Elon Musk announced a restructuring of the ambitious but troubled automaker on Tuesday, laying out a plan that will see 9 percent of the company’s workforce laid off.

Calling the decision “difficult, but necessary,” Musk said the cuts will come almost exclusively from its salaried workforce, leaving production workers in place. The company’s production targets for the Model 3 sedan haven’t changed, he insists.

The move comes not long after news of efforts to “flatten” Tesla’s management structure. In a company email he later posted to Twitter, Musk said the cuts are coming this week, adding that duplicated roles and job titles that no longer make sense are the targets of the restructuring. Long-term sustainability lies behind the decision, he added, describing his company’s goal of greenifying the entire world.

For hesitant investors, the profits Musk claims not to seek would go a long way towards calming nerves and boosting confidence. And it seems the past week was good for confidence — the company’s stock rose 17.7 percent between June 6th and this afternoon. (Last week’s @fruhlinger https://t.co/qsmxKCwoWZ pic.twitter.com/2ZCMchDpCS

— Tom Randall (@tsrandall) June 12, 2018

Musk plans to build a vehicle assembly/battery plant in Shanghai, with another starting construction in Europe by the end of this year. No shortage of funds will be required.

In last week’s meeting, Musk predicted “positive GAAP net income and positive cash flow in Q3 and Q4” — a statement that left some observers scratching their heads. In addition to the restructuring, Musk said Tesla would not renew its residential sales agreement with Home Depot; instead, the company’s solar power arm will focus on selling its wares online and in Tesla stores. The partnership, announced in February, involved 800 stores.

“The majority of Tesla employees working at Home Depot will be offered the opportunity to move over to Tesla retail locations,” he said, promising “significant” salary and stock vesting for employees let go.

Tesla employed a workforce of approximately 37,500 at the end of 2017, Bloomberg reports.

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  • BEPLA My own theory/question on the Mark VI:Had Lincoln used the longer sedan wheelbase on the coupe - by leaning the windshield back and pushing the dashboard & steering wheel rearward a bit - not built a sedan - and engineered the car for frameless side windows (those framed windows are clunky, look cheap, and add too many vertical lines in comparison to the previous Marks) - Would the VI have remained an attractive, aspirational object of desire?
  • VoGhost Another ICEbox? Pass. Where are you going to fill your oil addiction when all the gas stations disappear for lack of demand? I want a pickup that I can actually use for a few decades.
  • Art Vandelay Best? PCH from Ventura to somewhere near Lompoc. Most Famous? Route Irish
  • GT Ross The black wheel fad cannot die soon enough for me.
  • Brett Woods My 4-Runner had a manual with the 4-cylinder. It was acceptable but not really fun. I have thought before that auto with a six cylinder would have been smoother, more comfortable, and need less maintenance. Ditto my 4 banger manual Japanese pick-up. Nowhere near as nice as a GM with auto and six cylinders that I tried a bit later. Drove with a U.S. buddy who got one of the first C8s. He said he didn't even consider a manual. There was an article about how fewer than ten percent of buyers optioned a manual in the U.S. when they were available. Visited my English cousin who lived in a hilly suburb and she had a manual Range Rover and said she never even considered an automatic. That's culture for you.  Miata, Boxster, Mustang, Corvette and Camaro; I only want manual but I can see both sides of the argument for a Mustang, Camaro or Challenger. Once you get past a certain size and weight, cruising with automatic is a better dynamic. A dual clutch automatic is smoother, faster, probably more reliable, and still allows you to select and hold a gear. When you get these vehicles with a high performance envelope, dual-clutch automatic is what brings home the numbers.