Tesla shares news: Electric car company to lay off thousands in profits drive

Tesla shares closed higher Tuesday but are lower after hours after CEO Elon Musk confirmed the firm would lay off 9% of its workforce.

Tesla shares news: Electric car company to lay off thousands in profits drive

Tesla shares ended the US Tuesday trading session higher, amid confirmation the electric car manufacturer is set to cut thousands of jobs. CEO Elon Musk confirmed the news in a tweet after details of his email to company were leaked to the press.

Tesla shares closed 3.21% higher at $342.77. However, the stock is now in negative territory in after-hours activity.

Tesla job cuts

Tesla is set to lay off 9% of its staff this year. That equates to around 3,000 after figures show the firm employed some 37,000 at the end of 2017.

Musk said most of the job cuts would affect mainly salaried workers, while those working on actual car production would likely be unaffected. Tesla’s CEO described the reorganisation as a difficult but necessary change.

The move is designed to help improve profitability at the car maker, which has yet to make a quarterly profit after 15 years in operation.

“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,” Musk’s email to the company that he also posted on Twitter, read.

“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 can eventually demonstrate that we can be sustainably profitable,” he added.

Decisions already made

The email goes on to say that the decisions over who would lose their job had already been made. The company plans to inform those affected, this week.

“I would like to thank everyone who is departing Tesla for their hard work over the years. I’m deeply grateful for your many contributions to our mission. It is very difficult to say good bye,” the email states.

Each employee who is leaving the firm will receive “significant” remuneration and also “stock vesting,” Musk said.

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