Tesla to layoff 9 percent of workforce

Musk to fire 9% of staff in ‘difficult reorganization’ of perpetually unprofitable Tesla

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

Musk said that Tesla would provide laid off workers with "significant salary and stock vesting".

The company added that its rapid growth over the past several years has resulted in some duplication of roles and job functions.

Musk told employees in May that the company was undergoing a "thorough reorganization" as it contends with production problems, senior staff departures and recent crashes involving its electric cars.

In the note, which he tweeted out after it was leaked to media outlets, Musk said that almost all of the cuts would be salaried positions, and that the production staff is largely unaffected.

Tesla employees based at US DIY chain Home Depot and involved with the home solar business Tesla acquired when it bought SolarCity are among those affected, he said.

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Tesla said it started this year with about 37,000 workers, and increased that number by about 15 percent, which would make for a workforce of about 42,550. A majority of Tesla employees working at Home Depot will get offers to work in Tesla's own stores.

Musk wrote in the email that the company will never achieve its mission to help move the world to cleaner energy "unless we eventually demonstrate that we can be sustainably profitable". The firm has a sector weight rating and a $300 "fair value" price target on Tesla shares, which were up about 4% in pre-market trade Tuesday.

As many as 9% of Tesla's workforce will be let go.

Musk also announced that the company's solar panel unit has made a decision to end its agreement to sell via Home Depot stores so it can focus on sales in Tesla's company stores and online.

At the start of April, the company's shares had fallen by around 35 percent from a peak hit last September but signs that it is on course to meet an output target of 5,000 Model 3 cars per week have wiped out nearly all of this year's losses.

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