DETROIT (CBSLA/AP) — Electric car maker Tesla Inc. is laying off about 3,600 white-collar workers as it slashes costs in an effort to become profitable.
CEO Elon Musk says in an e-mail to workers Tuesday that the cuts amount to about 9 percent of the company’s workforce of 40,000.
The company did not say how much money the cuts would save.
The move will not affect factory workers as Tesla continues to ramp up production of its lower-priced Model 3 compact car.
Musk says the company is motivated by turning a profit. The company has not posted an annual profit in its 15 years of business – a fact Musk acknowledged in an email to Tesla employees cited by CNBC:
“Given that Tesla has never made an annual profit in the almost 15 years since we have existed, profit is obviously not what motivates us. What drives us is our mission to accelerate the world’s transition to sustainable, clean energy, but we will never achieve that mission unless we eventually demonstrate that we can be sustainably profitable. That is a valid and fair criticism of Tesla’s history to date.”
Musk says Tesla is making the move now so it never has to do it again. He says there’s still a significant need for additional production workers.
The job cuts come as Tesla struggles with meeting ambitious production targets for its Model 3 and faces a reported investigation into workplace conditions at the automaker’s Bay Area auto plant.
(© Copyright 2018 CBS Broadcasting Inc. All Rights Reserved. The Associated Press contributed to this report.)