Tesla’s workforce grew by 30% last year however, as Musk said this morning, this is something the company cannot sustain: “We unfortunately have no choice but to reduce full-time employee headcount by approximately 7% (we grew by 30% last year, which is more than we can support) and retain only the most critical temps and contractors. Tesla will need to make these cuts while increasing the Model 3 production rate and making many manufacturing engineering improvements in the coming months.”
He said: “Sorry for all these numbers, but I want to make sure that you know all the facts and figures and understand that the road ahead is very difficult,” after talking about how the company need to make the Model 3 more accessible in the market. “The need for a lower priced variant of Model 3 becomes even greater on July 1, when the US tax credit again drops in half, making our car $1,875 more expensive, and again at the end of the year when it goes away entirely.”
The cuts will mostly affect Tesla’s US workforce, but also affects its factories in the Netherlands, Germany and China, and offices in Japan, Australia, South Korea, Hong Kong and Taiwan. Musk said “To those departing, thank you for everything you have done to advance our mission. I am deeply grateful for your contributions to Tesla. We would not be where we are today without you.
“For those remaining, although there are many challenges ahead, I believe we have the most exciting product roadmap of any consumer product company in the world. Full self-driving, Model Y, Semi, Truck and Roadster on the vehicle side and Powerwall/pack and Solar Roof on the energy side are only the start.”