Electric car giant Tesla is letting go of nine per cent of its workforce, in a major restructuring designed to get the firm on track to become "sustainably profitable".
Announcing the plans this week, Founder Elon Musk said most of the 3,000 job cuts would be to roles and functions that had been "duplicated" as a result of the company's rapid growth in recent years. The cuts will come from the firm's salaried population, Musk added, and will not impact the production timetable for the Model 3, which has already been subject to repeated delays.
In a statement Musk acknowledged the company was facing increasing pressure to prove its worth as a profitable business.
"Given that Tesla has never made an annual profit in the almost 15 years since we have existed, profit is obviously not what motivates us," Musk said. "What drives us is our mission to accelerate the world's transition to sustainable, clean energy, but we will never achieve that mission unless we eventually demonstrate that we can be sustainably profitable. That is a valid and fair criticism of Tesla's history to date."
Tesla also said it has decided not to renew its deal with Home Depot to sell its home solar products, an initiative that only kicked off in February. Instead, Tesla will focus on shifting its solar power products through Tesla stores and online, it said.
The "difficult but necessary" move to tighten Tesla's fiscal belt follows a rocky couple of months for the carmaker, which posted a record $710m loss in the first three months of the year, prompting speculation from analysts that it would soon need to raise more capital.
Meanwhile, production rates of its first mass market car, the Model 3, are still well behind targets.
The company has lost money every year since it was founded in 2003, with total losses amounting to $5.4bn. But Musk is banking on the Model 3 to transform its profitability prospects by bringing electric vehicle (EV) technology to the mass market for the first time. Currently the company is making around 2,000 Model 3 vehicles every week, but Musk has insisted this figure will rise to 5,000 by the end of the summer as it seeks to fulfill a bulging order pipeline.
