Tesla to lay off 9% of workers as part of restructuring plan

Seeing Tesla Improving Production Rate: Keybank

Seeing Tesla Improving Production Rate: Keybank

The billionaire Chief Executive said that the cuts were part of a simplification of Tesla's management structure promised last month.

Tesla is slashing thousands of jobs, its chief executive Elon Musk announced Tuesday, as the electronic auto company attempts to hit production targets and reach profitability.

Shares of Tesla were up about 3.8% at the time of writing.

Tesla said it began notifying impacted workers on Tuesday and would continue to do so throughout the week. He said Tesla's rapid growth in recent years contributed to the duplication of roles and creation of jobs that the company could no longer justify. The layoffs would hit about 3,800 employees, company-wide.

Tesla will provide significant salary and vesting stock to employees being dismissed, Musk wrote in his memo.

Timing is critical here as the company is underway with an "all hands on deck" sprint to drastically ramp up Model 3 production rates.

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Musk in the email thanked the employees leaving the company and said the individuals will receive compensation. "We must continue to drive that forward for the good of the world". In a statement to the NLRB past year, it said: "At Tesla, we strive to be a fair and just company, the only kind worth being".

Tesla has also pushed back against accusations of poor worker safety and discrimination at company facilities, and headline-grabbing wrecks and investigations that have raised questions about the company's semi autonomous technology.

In the company letter, Musk said Tesla would end its residential sales agreement with Home Depot and focus on selling solar power in Tesla stores and online. A majority of Tesla employees working at Home Depot will get offers to work in Tesla's own stores.

Nearly all of the jobs are salaried positions, Musk said. I'm deeply grateful for your many contributions to our mission.

"Difficult, but necessary Tesla reorg underway", CEO Elon Musk wrote on Twitter. To those remaining, I would like to thank you in advance for the hard job that remains ahead.

The auto company is making some tough cuts in the name of profit.

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