"As part of this effort, and the need to reduce costs and become profitable, we have made the hard decision to let go of approximately 9% of our colleagues across the company".
The move is part of a broader safety effort by Tesla as it deals with recent accidents involving people driving with Autopilot turned on.
Business magnate, investor, engineer, eccentric billionaire, Tesla (TSLA) co-founder and CEO, Elon Musk, purchased upwards of 70,000 shares of the company, simultaneous with his announcement of layoffs of nearly 10% of employees. The company has not posted an annual profit in its 15 years of business.
Musk also clarified that just the salaried employees will be impacted by the decision and the planned layoffs will not affect the production of the Model 3 as there will be no production associates are being be cut.
The layoffs mean there likely will not be more job cuts in the near-term, said Efraim Levy, analyst at CFRA Research, adding that Tesla will likely raise capital early in 2019.
"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", Musk wrote. He says there's still a significant need for additional production workers.
Tesla shares rose 2.5 percent to $340.34 in afternoon trading, after reaching as high as $354.97 around noon. He said most Tesla employees working at Home Depot will be offered a chance to move to Tesla retail locations. "A focus on "getting lean" is a positive with respect to Tesla's guidance for achieving consolidated profitability in 2018, in our view", he wrote.
The Model 3 starts at $35,000, but lower-priced configurations are not available yet.