Tesla layoffs: Company cuts 9% of its staff

Tesla layoffs: Company cuts 9% of its staff

A hard few months for electric vehicle manufacturer Tesla was confirmed Tuesday, as the company announced it would slash 9 percent of its workforce as part of a "reorganization" that the eccentric, and often controversial, founder and CEO Elon Musk had hinted was coming earlier this year. The cuts, which focus nearly exclusively on salaried employees, do not include any production associates and thus will not affect the company's Model 3 production targets over the coming months.

Musk, 46, has said Tesla is on the cusp of making money by turning a corner with the Model 3.

Tesla (NASDAQ:TSLA) did say that the cuts would be primarily salaried positions in duplicate roles and that those affected would be offered jobs in its retail business.

"We are conducting a comprehensive organizational restructuring across our whole company", CEO Elon Musk said in a company-wide email that he later shared on Twitter.

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Is Tesla heading for trouble?

In addition to the restructuring, Tesla won't renew a residential sales agreement with Home Depot Inc. and focus instead on selling solar power in its own stores and online, Musk wrote.

In May, Musk announced a "thorough reorganization" in a memo to employees.

Up almost 7% earlier on Tuesday, shares of the company trimmed gains to stand 3.5% higher at $344 by early afternoon. According to Bloomberg, this is the largest layoff in Tesla's 15-year history.

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Up almost 7 percent earlier on Tuesday, shares of the company trimmed gains to stand 3.5 percent higher at $344 by early afternoon. Of late, it has faced questions about its ability to ramp up production, especially of its Model 3, the lower-priced sedan the company is counting on to drive sales.

As of Tesla's annual filing in December, the automaker had 37,543 full-time employees.

Tesla started selling solar panels and home battery packs at Home Depot earlier this year.

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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