It's not the first time Tesla has laid off workers.
Musk acknowledged the job cuts in a tweet today, shortly after news leaked to the media. That would mean around 4000 jobs will be lost in the restructuring.
The move follows Tesla starting a brutal review of contractors and firing everyone that is not vouched for by an employee last month. While the CEO has steadfastly ruled out the need to raise more money this year, the company has about $1.2-billion in convertible bonds maturing through to early 2019. Tesla is up 11.3% this year. Musk said in an e-mail to workers, today, that the cuts amount to about 9 percent of the company's workforce of 40,000.
Together, the Buffalo plant has more than 500 workers, Tesla has said.More news: Ireland: Polish man Mikolaj Wilk murdered in home invasion, partner seriously injured
Tesla has failed to ever turn a profit in its almost 15 years of business, and Musk noted this fact in a company-wide email he posted to Twitter. Their goal, he continued, is to accelerate the world's transition to sustainable, clean energy, but it's a mission they will never achieve unless Tesla eventually demonstrates it can turn a profit. According to Bloomberg, this is the largest layoff in Tesla's 15-year history.
The stock lost did lose some gains following news of the layoffs. In the past 12 months, amid production snags and debt-related jitters, shares have fallen 4.5%, while Ford and General Motors have climbed.
Why? Musk said that the intent is to reduce costs by removing people serving in duplicate roles or in positions that no longer make sense for the company. Well, Tesla supposedly had around 37,500 employees at the end of last year, with CNBC saying it has since added 8,000 more since the beginning of this year.
"The majority of Tesla employees working at Home Depot will be offered the opportunity to move over to Tesla retail locations", it said.More news: We Happy Few To Come Out August 10, 2018
Musk shared screenshots of the full company restructuring announcement letter on Twitter so that everyone could read it "unfiltered".
Tesla's workforce has grown at an incredible pace since the acquisition of SolarCity, which pushed Tesla's total headcount to over 30,000 employees. The firm raised its expectations based on conversations with sales centers, finding that Model 3 volumes are showing "meaningful ramp".
With Tesla shares up about 2 percent in late afternoon trading on Tuesday, shorts were down $278 million in mark-to-market losses, in addition to $549 million in losses on Monday, said Dusaniwsky.More news: Trump, Trudeau trade fight: Map of Canada exports to US
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