Tesla cuts 9% of white-collar employees

Tesla Inc. is cutting about nine per cent of its workforce as part of a restructuring, chief executive Elon Musk announced Tuesday. He said the cuts would not hurt the automaker’s ability to produce its Model 3 electric sedans.

Musk said in an email to employees that the Palo Alto company has “grown and evolved rapidly” over the past several years, resulting in duplication of some job functions.

The cuts, he said, were made “almost entirely” to salaried employees and not production workers.

Musk publicly released the text of the email on Twitter, saying it had been leaked anyway. He called the job cuts “difficult, but necessary.”

His email said the primary motivation for the cuts was to “accelerate the world’s transition to sustainable, clean energy,” but the company could not meet that goal without becoming profitable. “That is a valid and fair criticism of Tesla’s history to date,” he said.

The company also is not renewing its agreement to sell solar panels through Home Depot, and the majority of employees assigned to the sales effort will have an opportunity to work at Tesla’s own retail outlets, Musk said.

Workers who are being laid off are being offered “significant salary and stock vesting,” he said.

However, that does not mean that Tesla has instituted a hiring freeze.

“There is still a significant need for additional production personnel,” Musk said.