Elon Musk says Tesla will cut 9% of its workforce

Elon Musk says Tesla will cut 9% of its workforce

"Given that Tesla has never made an annual profit in the nearly 15 years since we have existed, profit is obviously not what motivates us", he wrote in an email to employees and posted on Twitter.

At the company's annual shareholder meeting earlier this month, Musk said he expected the Palo Alto, California, company to post a quarterly profit during the July-September period.

Tesla said it began notifying impacted workers on Tuesday and would continue to do so throughout the week. The areas were to be outfitted during the first half of this year and staffed by Tesla employees to demonstrate that its panels and batteries have mainstream appeal.

As described previously, we are conducting a comprehensive organizational restructuring across our whole company. That is a valid and fair criticism of Tesla's history to date.


"These cuts were entirely from our salaried population and no production associates were included, so this will not affect our ability to reach Model 3 production targets in the coming months".

Musk said that Tesla would provide laid off workers with "significant salary and stock vesting". Tesla still has a significant need for production workers as it tries to reach Model 3 manufacturing targets, he wrote in the email. I also want to emphasize that we are making this hard decision now so that we never have to do this again.

Up almost 7 percent earlier on Tuesday, shares of the company trimmed gains to stand 3.5 percent higher at $344 by early afternoon. Tesla is up 11.3% this year. "A focus on "getting lean" is a positive with respect to Tesla's guidance for achieving consolidated profitability in 2018, in our view, " he wrote.

"Our checks with sales centers indicate Model 3 deliveries are tracking [about] 50% higher than our prior estimates for the quarter, prompting us to raise our estimates", Erikson said in a note, according to CNBC.

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