Tesla will reduce 9% of employees – ITC.ua

Photo: Arnd Wiegmann / Reuters

Tesla plans to fire several thousand employees. Reorganization is a forced measure, due to the need to reduce costs, and is part of the plan for the producer to profitability. Earlier, Ilon Mask promised that in the third quarter Tesla will show profits.

The head of Tesla called the reductions a consequence of the planned simplification of the governance structure and assured that it was not will prevent us from achieving a mission critical to the company – to increase the production of Model 3 to 5000 pieces per week by the end of this month. However, the cut itself looks a bit strange, given the fact that in April Mask spoke about problems with robots and a significant expansion of staff.

Below is the full text of the translated Mask to the employees of the company:

"As already said Earlier, we plan to conduct a large-scale reorganization of the company. Tesla has grown rapidly in recent years, which led to the doubling of some positions. This decision made sense in the past, but now it's hard to justify it.

To cut costs and become a profitable company, we made the difficult decision to part with 9% of our staff. These reductions mainly concern hired employees, and our production partners are not included in this list. The situation will not affect the achievement of the goals for the production of the Model 3.

If we take into account the fact that for 15 years of existence Tesla has not yet shown its annual profit, it is obvious that money is not what we are working for. We are inspired by the opportunity to create a source of clean energy, but we will never achieve this goal unless we show the world that we can be a consistently profitable company. This is a fair criticism of Tesla.

This week we will notify everyone who is involved in this situation. We made a decision, critically evaluating each position and how much more efficiently. In addition, we assessed the abilities and skills of each employee of the company.

As you know, we continue to work on our organizational structure to establish communications within the company, reduce bureaucracy and solve problems faster. In addition to the restructuring, we decided not to renew the contract with Home Depot to focus on selling solar energy in Tesla stores and online. Most Tesla employees who are employed by Home Depot will receive a job offer from Tesla retailers.

I would like to thank everyone who has invested in Tesla over the years. I deeply appreciate your work. And it's hard for me to say goodbye. To mitigate the consequences of the dismissal, Tesla will offer employees with whom we part with a large salary and bonuses.

For clarity, Tesla will continue to hire brilliant employees for important positions, as we move forward and for this we need specialists in the production department. I also want to emphasize that the hard decision that we have to take now gives hope that in the future we will not have to do it anymore.

Thanks to everyone who leaves us. I wish you well in your future endeavors. All who remain, I want to thank in advance for the difficult work that we still have. We are a small company in one of the most competitive and complex industries on Earth, in which simply to keep afloat and grow is already an achievement (Tesla and Ford are the only American companies not declared bankrupt).

Despite our scale, Tesla is already played a significant role in the development of the industry and continue to move it forward. We must continue to do this, because we are benefiting this world.

Thank you, Ilon. " Ilon Mask, Chairman of the Board of Directors and CEO of Tesla.

Source: Bloomberg and VC

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