Tesla CEO Elon Musk confirmed on Tuesday that the company will be laying off 9% of its employees in order to save costs and streamline organizational processes.
This year, Tesla added 8,000 employees to bring its total to 46,000 according to various reports. At 9%, it’s cutting a little over 4,000 employees – half as many as it hired in 2018. In the email to employees, Musk said Tesla’s rapid growth over the last 10 years, as depicted by this chart from Statista, is to blame for a “duplication of roles and some job functions that […] made sense in the past, [but] are difficult to justify today.”
Musk added that the layoffs will affect mostly salaried employees rather than production workers, meaning it won’t affect production targets for its Model 3, which Tesla launched almost a year ago.
Tesla’s CEO recently rejected the idea that the company was in need of additional cash from public markets to stay afloat, even after it has experienced unexpectedly high production costs for its newest model. Investors have expressed concern about the company’s cash burn in the past, but these layoffs show that Tesla executives are starting to think its time to be more prudent with spending.
- Jenny Cheng/Business Insider