Electric auto maker Tesla Inc.is laying off about 3,600 white-collar workers as it slashes costs in an effort to become profitable.
Tesla is cutting 9% of its workforce in a company-wide restructuring.
Nearly all of the jobs are salaried positions, Musk said.
Musk said the cutbacks would not affect the company's ability to reach Model 3 production targets in the coming months. Musk wants to flatten the management structure at the company to make it less bureaucratic.
The company would, he continued, "never achieve" its mission to "accelerate the transition to sustainable, clean energy" unless Tesla is able to "eventually demonstrate that we can be sustainably profitable". For almost all of its history, Tesla has put up losses while investing heavily in technology, manufacturing plants and an extensive car-charging network. Numerous production problems have led to far fewer numbers of vehicle exiting the factory that intended, and there have been reports of high wastage, adding to costs. Musk said Tesla is making the move now so it never has to do it again.
Together, the Buffalo plant has more than 500 workers, Tesla has said. But since then, it looks like Tesla got the Model 3 production back on track.
Tesla has announced it is cutting 9% of staff, risking 4,000 jobs worldwide, in a move created to improve profitability.
Tesla has grown rapidly, increasing headcount by more than 15% since the start of the year, according to a company spokesman, so the cuts will leave the headcount higher than it was at the beginning of the year. The majority of Tesla employees working at Home Depot will be offered the opportunity to move over to Tesla retail locations. The Associated Press reports the 9 percent amounts to about 3,600 employees.
Blaming "some duplication of roles and job functions" that have emerged as the company has expanded, Musk said Tesla would be "evaluating the criticality" of each position, "assessing the specific skills and abilities of each individual in the company".
In addition to laying off some workers, Musk revealed that Tesla is declining to renew its residential sales agreement with the hardware and home improvement store Home Depot, a move meant to "focus our efforts on selling solar power in Tesla stores and online".
"It is very hard to say goodbye", Musk said in the letter.