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Elham AbolFateh

Automobile

Tesla cuts 7 percent of its workers but wants to boost Model 3 production

Friday 18/January/2019 - 08:18 PM
Sada El Balad
Edited by Ahmed Moamar
After a rare stretch of profitability and record-setting production and delivery numbers، Tesla now says that it will cut 7 percent of its workforce as part of a cost-cutting effort -- the second round of mass layoffs since summer 2018. While the automaker did not state the actual number of jobs being cut، analysts estimated a figure of 3،150 based on the 45،000 total number of employees that Tesla CEO Elon Musk said the company employed، as Auto Week said.

In a companywide email also posted on Tesla's blog Musk gave several reasons for the drastic cuts، in addition to tempering expectations of even a moderate profit for the first quarter of 2019.

"In Q3 last year، we were able to make a 4% profit،" Musk said in a blog post. "While small by most standards، I would still consider this our first meaningful profit in the 15 years since we created Tesla. However، that was in part the result of preferentially selling higher priced Model 3 variants in North America. In Q4، preliminary، unaudited results indicate that we again made a GAAP profit، but less than Q3. This quarter، as with Q3، shipment of higher priced Model 3 variants (this time to Europe and Asia) will hopefully allow us، with great difficulty، effort and some luck، to target a tiny profit."

Musk cited the need for lower-priced variants of the Model 3 -- something the company has avoided until now in the production of its smallest model -- as well as Tesla's approaching wave of competitors. The CEO also cited the approaching end of the federal tax credit.

"Right now، our most affordable offering is the midrange (264 mile) Model 3 with premium sound and interior at $44k،" Musk added. "The need for a lower priced variants of Model 3 becomes even greater on July 1، when the US tax credit again



Read more: https:autoweek.comarticleluxuryheres-why-tesla-cutting-7-percent-its-workforce-amid-gloomy-outlook#ixzz5cz61tvWV

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