Tesla to cut 9pc of jobs as it seeks profitability

Tesla is cutting 9% of jobs Elon Musk says layoffs won't hurt Model 3 production

Cars are lined up near the Tesla Motors factory complex in Fremont Calif. in 2016

The rep also tells The Drive that the company is still hiring rapidly and that after this round of job cuts, Tesla will still boast more employees than it had at the beginning of 2018.

Tesla has been burning through cash as it continues to spend on its assembly line and prepares for new investments on projects such as the Model Y crossover and its Gigafactory. Each time, after a few quarters of small profits, Tesla would ramp up production of another auto model-first the Model X, then the Model 3-and rack up more big losses, as this chart from Bloomberg shows. The company has yet to make a profit since it was founded by the entrepreneur in 2003, and Musk said following a "comprehensible organizational restructuring". Following a leak of the news, company CEO Elon Musk has confirmed the news and shared the full "reorg" letter sent to employees.

Tesla earlier failed to reach a number of key benchmarks for Model 3, leaving Wall Street analysts concerned that Tesla would not reach its goals. Analysts had expected a loss of $3.58 (£2.63) per share. But Musk has promised an acceleration of Model 3 manufacturing, which will allow the company to bring in a lot more revenue.

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 Inc.is laying off about 3,600 white-collar workers as it slashes costs in an effort to become profitable.

In his email, Musk said the layoffs primarily affected salaried positions and will not affect Model 3 production. For almost all of its history, Tesla has put up losses while investing heavily in technology, manufacturing plants and an extensive car-charging network.

This week, we are informing those whose roles are impacted by this action.

The company evaluated the necessity of the various positions, looking at this "criticality" in determining whether they would remain. As part of the reorg, we are flattening the management structure to improve communication, combining functions where sensible and trimming activities that are not vital to the success of our mission. Tesla said it would focus its solar energy sales efforts through its electric vehicle stores and online. Home Depot started selling Tesla's solar energy services in February. "I'm deeply grateful for your many contributions to our mission. It is very hard to say goodbye", the CEO wrote. He says there's still a significant need for additional production workers.

To those who are departing, thank you for everything you have done for Tesla and we wish you well in your future opportunities.

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