Tesla slides after report says it plans to cut 3,000 jobs (TSLA)


Elon Musk is cutting 9 per cent of the workforce at Tesla Inc., a turnabout that underscores the mounting pressure he is under to show the electric-car maker can one day turn a profit.

"Given that Tesla has never made an annual profit in the nearly 15 years since we have existed, profit is obviously not what motivates us", Tesla said.

Tesla did not say how much money the job cuts would save.

The layoffs at Elon Musk's electric vehicle company come as it tries to increase production of its Model 3 sedan and turn a quarterly profit this year. That price target is about 10% lower than Tesla stock's recent prices near $332 per share. The company let go of 400 to 700 workers last fall after completing annual performance reviews, and it laid off a small number of workers back in 2008.

Tesla told CBC News that it had over 42,000 employees around the world.

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The move coincided with a significant jump in Tesla's stock price following a report from Keybanc Capital Markets that it increased its second-quarter production outlook for the Model 3 by 50 percent.

The company is making the move now so it never has to do it again, he wrote.

Musk also announced that the company's solar panel unit has chose to end its agreement to sell via Home Depot stores so it can focus on sales in Tesla's company stores and online. His company began to roll out Tesla-branded selling spaces at 800 Home Depot locations earlier this year, building on a previous relationship the retailer had with SolarCity Corp., which Tesla acquired in 2016.

"These cuts were entirely 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". "A focus on "getting lean" is a positive with respect to Tesla's guidance for achieving consolidated profitability in 2018, in our view, " he wrote. But Musk has promised an acceleration of Model 3 manufacturing, which will allow the company to bring in a lot more revenue.