Tesla to cut workforce by 7% after ‘most challenging’ year

Tesla plans to cut its full-time staff by 7 per cent – around 3,400 employees – after “the most challenging” year in the electric carmaker’s history.

In a blog post on Friday, Elon Musk, Tesla's chief executive, said the group had "no choice" but to reduce its staff numbers after they rose by 30 per cent last year. He added that the company would "retain only the most critical [temporary workers] and contractors".

Explaining the job cuts, Mr Musk said the company faced “an extremely difficult challenge” in making its products cost-competitive with fossil fuels.

“While we have made great progress,our products are still too expensive for most people,” Mr Musk wrote. “We need to continue making progress towards lower priced variants of Model 3.

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“Tesla will need to make these cuts while increasing the Model 3 production rate and making many manufacturing engineering improvements in the coming months. There isn’t any other way.”

The group had 37,543 full-time employees at the end of 2017, according to a filing with the US Securities and Exchange Commission.

A Tesla spokesperson confirmed the authenticity of the blog that was posted early in California on Friday. – Copyright The Financial Times Limited 2019