Tesla C.E.O and world-famous entrepreneur Elon Musk, is again making news but not for introducing another sustainable electric vehicle to the market. This time, these are the Tesla lay-offs which are making the headlines. And, the company’s C.E.O has justified the decision in a tweet.
Elon Musk on Tesla Lay-Offs
Before, the Elon Musk’s tweet that explained the Tesla lay-offs CNBC had already published the full letter that was probably emailed to concerning employees.
In his Tweet, Tesla C.E.O explained that layoffs only targeted the salaried positions and wouldn’t affect those in production. He attached the entire unfiltered post in his tweet that explained reasons behind employee’s restructuring in Tesla.
Difficult, but necessary Tesla reorg underway. My email to the company has already leaked to media. Here it is unfiltered: pic.twitter.com/4LToWoxScx
— Elon Musk (@elonmusk) 12 June 2018
According to letter Tesla lay-offs were targeting 9% of the company’s employees in the salaried positions, and they were not affecting production. The letter also explained that these layoffs will not impact the production targets for Tesla Model 3.
Is Profitability the Real Motive
An analysis of the letter’s content reveals that real motive behind Tesla lay-offs is to be “sustainably profitable”. It further explained that company had never made an annual profit since last 15 years. Profit was not that motivated them but it was the mission to accelerate the world’s transition towards sustainable and clean energy. But they will never achieve the mission unless the demonstrate their ability to be sustainably profitable.
It seems that Tesla-layoffs aimed at reducing the costs and paying more attention towards production. As, per media reports the company indeed has a history of missing its production targets.
Are Lay-Offs Related to Unionization
Recently, news also emerged that Tesla labors were complaining of the tough working conditions and company not letting them to unionize. Despite such reports, there was no decline in the demand for Tesla jobs. The company that employs more than 37,000 people, reportedly received a record 500,000 jobs only in 2017. So any possibility that might hold labor grievances responsible for Tesla lay-offs is entirely ruled out.
Elon Musk has also thanked the departing employees and announced a significant salary and stock vesting proportionate to length of their service. The C.E.O has also clared the lay-offs dont mean that there wouldn’t be any new hiring. The company would be always on look for talent for the critical roles.
Tesla, a major electric car manufacturer is likely to update its autopilot V9 to full self-driving features. The C.E.O also announced about using rocket thrusters in the Tesla roadster. So, it is interesting to see a visionary company with multiple projects in hand, choosing for employee lay-offs only to save costs.