Tesla Announces Plans to Cut 9% of Its Workforce

In an attempt to streamline its organization and save costs, Tesla will lay off about 9 percent of its workforce. The job cuts, which were confirmed by the company’s CEO Elon Musk on Twitter after an internal mail was leaked to the media, will mostly affect salaried employees as opposed to production workers and, according to Musk, won’t effect Model 3 production targets.

“Tesla has grown and evolved rapidly over the past several years, which has resulted in duplication of roles and some job functions that […] are difficult to justify today”, Musk wrote in an email to his employees, adding that the need to reduce costs and become profitable also played a part in the decision.

Investors have lately become increasingly worried about Tesla’s cash burn, as the company’s production ramp up for the mass-market Model 3 is proving more costly than expected. Musk renounced the idea of his company having to raise additional cash from public markets during an earnings call in May, but the upcoming layoffs show that the company is under pressure to keep costs at bay.