In a tweet that was posted on Twitter last night, Elon Musk, the chief executive of Tesla confirmed that the electric car maker is slashing several thousand jobs across the workforce of the company in an attempt to lessen its costs as it ramps up its production of the Model 3.
In an email that was sent to its staff, Musk said that the cuts are equivalent to about nine percent of the staff. It had been preplanned as a part of a “thorough reorganisation” of the management structure of Tesla.
The firm revamped its targets for the production of the Model 3 down to 5,000 cars per week, to be achieved by the end of this Month.
The email to the employees read: “As part of this effort, and the need to reduce costs and become profitable, we have made the difficult decision to let go of approximately 9 percent of our colleagues across the company.”
It added: “These cuts were almost entirely made from our salaried population and no production associates were included, so this will not affect our ability to reach Model 3 production targets in the coming months.”
Elon Musk also said that an existing residential sales agreement with Home Depot, a chain that is based in the United States of America, will not be renewed and that the company would refocus on sales via its own channels.
Analysts expect that Tesla will start raising fresh capital later this year, despite the statements from Musk that he anticipates it to achieve profitability within the third or fourth quarter of the year.
The share price of Tesla rose by 3.21 percent to $342.77 at the close of the markets.