Tesla undecimates its workforce but Elon insists everything's absolutely fine

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Tesla undecimates its workforce but Elon insists everything's absolutely fine

Tesla Inc is cutting about 9 percent of jobs across the company, billionaire Chief Executive Elon Musk said on Tuesday, as it seeks to reduce costs without endangering the critical ramp up of production of its Model 3 sedan.

Tesla's announcement comes a month after Musk announced a restructuring of Tesla's organizational chart. Musk said the decision was made as the automaker works to become profitable.

The company added that its rapid growth over the past several years has resulted in some duplication of roles and job functions.

Tesla is cutting 9% of its workers as part of a reorganization created to reduce costs and help the electric automaker become profitable, according to an email CEO Elon Musk sent to employees Tuesday and obtained by Fortune.

In the note, which he tweeted out after it was leaked to media outlets, Musk said that almost all of the cuts would be salaried positions, and that the production staff is largely unaffected.

Tesla started 2018 with about about 37,000 employees globally and has hired thousands of employees since then.

Tesla has never been profitable in its 15-year existence.

This is part of the reorganization Musk talked about in May on the company's quarterly earnings call. At the time, Tesla had 33,000 employees, suggesting that Tesla's headcount is still on an upward trajectory overall. For almost all of its history, Tesla has put up losses while investing heavily in technology, manufacturing plants and an extensive car-charging network.

Musk's note also said that Tesla will end distribution of its solar power and home battery equipment at Home Depot and focus on direct sales instead. So a nine-percent cut means letting more than 3,000 workers go.

At the start of April, the company's shares had fallen by around 35 percent from a peak hit last September but signs that it is on course to meet an output target of 5,000 Model 3 cars per week have wiped out nearly all of this year's losses.

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