Tesla to lay off 9% of workers as part of restructuring plan

Tesla to lay off 9% of workers as part of restructuring plan

The layoffs at Elon Musk's electric auto company come as it tries to increase production of its Model 3 sedan and turn a quarterly profit this year.

Musk confirmed the job cuts on social media after an internal email became public.

Tesla shares, which are up almost 10 percent on the year, rose on news of the job cuts. What drives us is our mission to accelerate the world's transitions to sustainable, clean energy, but we will never achieve that mission unless we eventually demonstrate that we can be sustainable profitable.

Is Tesla heading for trouble?

Last week, Musk overcame an attempt to strip him of his role as chairman of Tesla's board, a plan introduced by a company shareholder who raised doubts about Musk's ability to manage multiple companies simultaneously.

The move is part of an organizational restructuring that Musk announced earlier in the year.

Tesla said it began notifying impacted workers on Tuesday and would continue to do so throughout the week.

Tesla will provide "significant" salary and vesting stock to employees being dismissed, Musk said.

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Although Tesla had a good May, its Model 3 compact luxury sedan launch has been significantly delayed by production problems.

While Musk didn't mention how many employees specifically will be let go, Tesla's annual filing from December 2017 showed it had 37,543 full-time employees.

After the news broke on Tuesday, Tesla shares rose 2.5 percent to $340,34 per share and even hit as high as $354.97 around noon, the news organization reports. According to Bloomberg, this is the largest layoff in Tesla's 15-year history.

Tesla has been burning cash nearly continuously since it was founded 15 years ago. "I'm deeply grateful for your many contributions to our mission".

Musk added that the employees affected would be notified this week, and that Tesla is also continuing to flatten its management structure to "help us communicate better, eliminate bureaucracy and move faster".

"It is very hard to say goodbye", Musk said in the letter.

What do you think the future holds for Tesla?

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