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Tesla To Give The Pink Slip To 7 Percent Of Its Employees


01/18/2019


Tesla To Give The Pink Slip To 7 Percent Of Its Employees
The strategic plan of Tesla to increase production of its lower priced versions of its crucial Model 3 sedan also mandates that the company cuts its operational s\costs which has forced the company to announced jobs cuts in thousands.  The announcement left its shares down by 7 per cent.
 
The company also expects that it would be able to achieve lower profits for the fourth quarter compared to the previous quarter. Tesla has struggled to make continuous profits in the long term.
 
Tesla needs to be able to reach out to more customers across the world and for this purpose the car maker has to deliver at least the mid-range Model 3 version in all of its markets starting around May, said Chief Executive Officer Elon Musk.
 
Additionally, progress toward a lower-priced Model 3 also needs to be made by it, the company said.
 
Both musk and Tesla has been under investor pressure to create achieve some stability in production of its Model 3 which the company had unveiled way back in early 2016 and is believed to be critical for the company in achieving profitability in the long run. 
 
However, Tesla has found it hard to deliver Model 3 to consumers. Many of such customers have been awaiting delivery since early 2016 when they had booked the car. Tesla had moved from “production hell to delivery logistics hell”, Musk had said last year.
 
In the last seven months, this is the second occasion that Tesla has decided to cut jobs. The announcement also came just a few days after the electric car maker announced that it had not been able to meet delivery targets for the last quarter of 2018 for its mass-market Model 3 sedan and a few days after it announced a cut for all of its vehicles in the US.
 
2018 was the “most challenging in Tesla’s history,” Musk has told his employees on Friday in a memo and added that 30 per cent of the total number of employees was hired by the company in 2-18 which was more than Tesla could afford.
 
“I want to make sure that you know all the facts and figures and understand that the road ahead is very difficult,” Musk said.
 
“There isn’t any other way,” he added.
 
Musk said that it was very important for Tesla to be able to deliver the low priced Model 3 by July 1 because that is the day since when there would again be a drop in half in the U.S. tax credit. When that happens, the Model 3 would become more expensive by $1,875. And again at the end of 2019, the credit lijmit would be reduced and therefore again make Tesla cars more expensive.
 
“Headcount reduction is part of the process of reducing Model 3 price point with the lower range battery and offsetting the reduction in U.S. federal tax credits,” Jefferies analyst Philippe Houchois said .
 
(Source:www.timesofindia.com)