Elon Musk Slashes Workforce, Says Road Ahead for Tesla Looks ‘Very Difficult’

Photo: Mason Trinca/The Washington Post/Getty Images

Elon Musk, the Tesla CEO and dude who once called a decorated rescue diver a “pedo” because his feelings were stung, announced on Friday the company is letting go of seven percent of its full-time staff. Musk sent an email to his staff, detailing the reasons for the cuts. This week, Tesla also stopped production of Model S sedans and Model X SUVs. Musk said the company needs to focus its efforts on creating a cheaper offering than its most cost efficient vehicle – a $44k Model 3 – at present. And doing that “requires extreme effort and relentless creativity” and … job cuts.

From Musk, via CNBC:

We unfortunately have no choice but to reduce full-time employee headcount by approximately 7% (we grew by 30% last year, which is more than we can support) and retain only the most critical temps and contractors. Tesla will need to make these cuts while increasing the Model 3 production rate and making many manufacturing engineering improvements in the coming months. Higher volume and manufacturing design improvements are crucial for Tesla to achieve the economies of scale required to manufacture the standard range (220 mile), standard interior Model 3 at $35k and still be a viable company. There isn’t any other way.

The news follows a nine percent staff reduction in June 2018 to “reduce costs and become profitable.” Tesla posted a four percent profit in Q3 of 2018, which Musk, in his email called “our first meaningful profit in the 15 years since we created Tesla.”

Elon Musk Cuts Workforce, Says Road Looks ‘Very Difficult’