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9% Tesla Employees To Be Laid Off By The Company


06/15/2018


9% Tesla Employees To Be Laid Off By The Company
Electric car maker Tesla has announced to its employees that there would be a 9 percent cut in its workforce where the jobs cuts would mostly be done for salaried positions.
 
At present, there is about 46,000 employees with the company and it has hired about 8000 of them this year itself. About 4,100 jobs would be shed through this reorganization.
 
Announcement that Tesla was undertaking a “thorough reorganization” was made by tesla CEO Elon Musk in mid-May this year. the company wants to flatten its structure. 
 
"To be clear, Tesla will still continue to hire outstanding talent in critical roles as we move forward and there is still a significant need for additional production personnel," Musk said in a letter to employees on Tuesday. "I also want to emphasize that we are making this hard decision now so that we never have to do this again."
 
The sentiment was again reiterated in a tweet by Musk on Tuesday in which he said that the cuts were "difficult, but necessary."
 
Tesla is maturing and prioritizing profitability is ted education that was made about the move by CFRA analyst Efraim Levy.
 
"There is a normal ebb and flow of hiring and firing in a business," he said. "Nine percent is a big chunk to do at once, but there comes a time when a company grows up and they have to cut out the fat to become more efficient."
 
In the email to employees, Musk said "profit is obviously not what motivates us," considering the almost lack of it historically for the company. however, he added that the it had become necessary for Tesla to reduce costs and make money.
 
There was some let down in the gains made by Tesla shares following the announcement of the lay-offs. There has bene some signs recently that Tesla is in some trouble. Its effort to increase production facilities for affordably priced Model 3 sedan which is the cornerstone for its future plans, has seen the company exhaust billions of dollars.
 
There have bene criticisms of the company about its missing deadlines regularly despite revising them. the current target of the company is to attain a production rate of 5,000 Model 3 cars in a week within this month end.
 
Additionally, Musk has announced that he expects Tesla to deliver profits and report positive cash flow starting the third quarter of the year. However, there are critics who claim that the company would require to raise fresh capital by the first quarter of 2019. 
 
The rate of incidents of turnover at its highest ranks have also been high which the exit of a number of senior executives during the last few months.   
 
In recent years, there has been rapid growth of Tesla. The company would continue to employ more people than it did at the end of 2017 even after the exit announced on Tuesday.
 
(Source:www.cnbc.com)


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