Tesla to lay off more than 3,000 workers

Tesla CEO Elon Musk said about 9 percent of the company's workforce -- about 3,000 people -- will be laid off. File Photo by Joe Marino/Bill Cantrell-UPI | License Photo

By Danielle Haynes, UPI

Tesla is laying off more than 3,000 employees, CEO Elon Musk announced in an employee email Tuesday, saying Model 3 production positions won't be affected.

Musk said the downsizing is meant to make Tesla more profitable.

"Tesla has grown and evolved rapidly over the past several years, which has resulted in some duplication of roles and some job functions that, while they made sense in the past, are difficult to justify today," he said in the memo to employees.

The memo didn't say specifically how many jobs would be cut, only that 9 percent of the workforce would be laid off. In a Securities and Exchange Commission report filed at the end of December 2017, the company said it had 37,543 full-time employees, meaning at least 3,000 will be impacted.

Musk said the cut positions are mostly salaried jobs, leaving production positions untouched to allow for an increase in Model 3 production.

In May, the CEO said he would build a new factory later this year to handle increased production. Musk said existing Tesla plants are "jammed to the gills," so a new factory will produce the automaker's first mass-market-priced SUV, the Model Y, and include a battery plant that will lure thousands of new jobs.

Musk said Model Y production will begin in about two years, joining the Model S and X luxury lines and Model 3 mass-market electric vehicle. Tesla has one factory in Fremont, Calif., which hits production levels of 4,000 per week, and a battery plant outside of Reno, Nev.

"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's memo said Tuesday. "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."