Tesla cuts 9 percent of workforce in bid to post profit

Seeing Tesla Improving Production Rate: Keybank

USA electric vehicle giant Tesla is laying off nine per cent of its workforce, the company announced on Tuesday.

Tesla is cutting nine percent of its workforce, CEO Elon Musk announced today in a memo to staff.

Elon Musk, Tesla's chairman, said on Twitter that the job cuts were "difficult, but necessary". Musk said the layoffs won't affect production of the Model 3, since no production associates are being be cut.

Musk claimed the profit has never been Tesla's motivation, adding: "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". For almost all of its history, Tesla has put up losses while investing heavily in technology, manufacturing plants and an extensive car-charging network. Tesla now employs approximately 46,000 workers, with roughly 8,000 positions added since the start of the year, according to CNBC. Tesla will, however, continue to take on new staff, as a "significant need for additional production personnel" remains within the company.

Shares rose as much as 7 percent and were last up 3.6 percent at $344.18.

The company said it ended the quarter with $3.2 billion (£2.3bn) in cash after spending $655.7 million (£483m) in quarterly capital expenses.

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The company has not posted an annual profit in its 15 years of business.

Tesla said it began notifying impacted workers on Tuesday and would continue to do so throughout the week.

Hyped by the CEO as his most affordable electric auto when production began nearly a year ago, the company has repeatedly missed manufacturing targets, contributing to billions of dollars in ongoing losses and cash burned. Most employees assigned to Home Depot positions will have the option to move to Tesla's retail stores, says Musk.

The Tesla-branded kiosks were created to educate consumers and ultimately generate sales of its residential rooftop solar panels and Powerwall, a battery it designed for homes that store the energy generated by solar panels.

Tesla told employees who work in the company's home energy department that it would not renew its residential sales agreement with Home Depot during a brief all-hands conference call Tuesday morning, according to a Tesla employee who asked not to be named.

"It is very hard to say goodbye", Musk said in the letter.

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