Shares of Tesla sank about three percentage points from their intra-day high on Tuesday after Electrek reported the company was planning to lay off over 3,000 employees - or roughly 9% of its workforce. Musk said the layoffs won't affect production of the Model 3, since no production associates are being be cut.
Electric vehicle maker Tesla is laying off about 3,600 white-collar workers as it slashes costs in an effort to become profitable.
The email from Musk said.
Tesla employed more than 37,000 people at the end of previous year. Musk has stated that 5,000 units a week by the end of the year is a critical number for Tesla to achieve sustainable profitability - something it has never done once in its 15-year history.
To ensure that Tesla is well prepared for the future, we have been undertaking a thorough reorganization of our company.
In the email, he said the cuts are aimed at eliminating duplicate roles and he does not expect them to affect the firm's production ability.More news: 3.5 minutes of Jump Force gameplay
The layoffs come in engineering, sales and other front-office functions, but the company says the remaining workforce is large enough to accomplish Musk's lofty goals of rolling out a semi, pickup truck and a new SUV in the coming years.
Last month, Musk warned employees in a separate letter obtained by Electrek that Tesla is undertaking a "reorg" that would flatten the management structure and trim activities "that are not vital to the success of our mission". The company said the firings involved non-manufacturing positions and were unrelated to production delays involving the Model 3.
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.
Tesla started selling solar panels and home battery packs at Home Depot earlier this year. "I'm deeply grateful for your many contributions to our mission".
The company is making the move now so it never has to do it again, he wrote. "It is very hard to say goodbye".
To those who are departing, thank you for everything you've done for Tesla and we wish you well in your future opportunities.