Tesla will lay off 9% of its workforce in a major restructuring that the electric car maker insists will not affect its plans to produce the Model 3, its mainstream electric car.

Details

Tesla CEO Elon Musk tweeted Tuesday that the move was "difficult but necessary" so the company can contain costs while ramping up production of its latest model.

https://twitter.com/elonmusk/status/1006597562156003328

Musk has promised that the cuts will not affect production and therefore will not affect the company's ability to meet Model 3 targets in the coming months. As the CEO of Tesla clarified, layoffs will take place as part of the reorganization of the company, which he announced in May.
At first, Musk announced the upcoming cuts only in a letter to company employees. However, after the document was leaked to the press, the head of Tesla published it on his Twitter account.
As Reuters clarifies , we are talking about the dismissal of several thousand employees. As a result of the reductions, the total number of company employees will return to 37 thousand people (this corresponds to the level at the end of last year).
On news of the upcoming cuts, Tesla shares rose by 7%, but later fell again and at the time of publication the news was 3% higher than the previous day's close.
“The layoff of 9% of employees is a good number and I don’t think we should expect more layoffs in the near future,” said Ephraim Levy, an analyst at CFRA Research.

Context

In early April, the company's shares were down about 35% from their highs in September last year, but signs that the company was on track to meet its Model 3 production target of 5,000 vehicles per week have helped erase those losses.

Tesla will lay off 9% of employees