Electric car and solar panel maker Tesla’s CEO Elon Musk said that the road ahead was “very difficult,” and that they will cut down their staff by 7 percent.
Tesla notified their employees regarding the staff cuts and various other plans via an email which was posted on Tesla’s website. Musk added that Tesla hopes to post up a “tiny profit” in this current quarter but an unexpected 30 percent expansion in their workforce in the year 2018 was all it could support.
Tesla’s shares went down earlier in January after it cut down its vehicle prices by $2,000 (roughly Rs. 1.4 lakhs) and announced that the fourth-quarter revenue figures were less than what Wall Street had estimated.
During a memo to the staff of Tesla, Musk said- “Our products are too expensive for most people. We, as a company, need to work harder. Tesla has been producing cars for only a decade and we are already up against the massive, entrenched competitors.”
During a tweet in October, Musk had told that Tesla currently had 45000 employees. Now, if the 7 percent cut off is made on the 45000 employees, about 3150 people’s jobs are at risk.
Musk added- “We, unfortunately, have no choice but to reduce the full-time employee headcount by about 7 percent … and we will retain only the most critical temps and contractors.”
The company added that it had delivered more than 245,000 electric cars and SUVs in 2018, and this was about as many as all previous years sales combined. But their 2018 production fell very much short of a goal that was set up about three years ago, which was to manufacture 500,000 vehicles for the year. This goal had been announced in May of 2016 and it was based on advance orders for their mid-range Model 3, which is sold at $44,000.
Musk told that Tesla plans to ramp up their production of the Model 3, stating- “as we need to reach more customers who can afford our vehicles. Attempting to build affordable clean energy products at the right scale requires extreme effort and relentless creativity. But succeeding in our mission is very much essential to ensure that our future is good, hence we need to do everything we can in order to advance the cause.”
Tesla broke the grounds earlier in January when they set up a factory in Shanghai, which will be their first outside the United States manufacturing unit. Musk went on to say that they have plans to start production of their Model 3 in the Shanghai factory and a planned crossover by the year’s end.
Tesla and other global automakers, which includes General Motors Co., Volkswagen AG and Nissan Motor Corp. have been pouring billions of dollars in manufacturing electric vehicles in China.