Thursday, 21 June, 2018

Tesla to lay off 3,600 workers in effort to turn a profit

He emphasised on the fact that Tesla has never made an annual profit Tesla to lay off 3,000 employees, CEO Elon Musk says it's difficult to say goodbye
Ginger Lawrence | 14 June, 2018, 08:33

Tesla would not say how much money the layoffs would save, but said no factory workers would be affected as the company continues to ramp up production of its lower-priced Model 3 compact vehicle.

"Tesla has grown and evolved rapidly over the past several years, which has resulted in some duplications of roles and some job functions".

The layoffs mean there likely will not be more job cuts in the near-term, said Efraim Levy, analyst at CFRA Research, adding that Tesla will likely raise capital early in 2019.

Tesla Motors CEO Elon Musk has purchased about $25 million worth of stock in his own company, according to a filing with the Securities and Exchange Commission on Wednesday.

The share purchases could be a signal to employees and Wall Street that he's still optimistic about the future of Tesla.

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"The company will pull out all the stops, it will do a lot of one-time items, we believe, to show a GAAP profit in the third quarter". "We will never achieve [our] mission unless we eventually demonstrate that we can be sustainably profitable", he wrote in the letter.

Tesla's Autopilot semi-autonomous auto tech has been implicated in numerous crashes lately, and though it's been tough to say where the blame for these incidents lies, Tesla is convinced their software isn't at fault. He says there's still a significant need for additional production workers.

The report comes amidst other significant news becoming public, that the company is laying off almost 10% of its workforce. He said most Tesla employees working at Home Depot will be offered a chance to move to Tesla retail locations.

He wrote that reaching Musk's Model 3 production goal of 5,000 vehicles per week by the end of June is still the primary driver of profitability. It can easily top $50,000 with options.