Tesla Cuts 9% of Workforce in Bid to Post Profit

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Musk said most Tesla employees who had worked at the company's Home Depot displays will be allowed to work at Tesla's stores.

Tesla Inc.is laying off about 3,600 white-collar workers as it slashes costs in an effort to become profitable.

Tesla is reportedly planning to lay off approximately 4,100 of its 46,000 employees to cut costs. The company has yet to make a profit since it was founded by the entrepreneur in 2003, and Musk said following a "comprehensible organizational restructuring".

Tesla has grown rapidly, increasing headcount by more than 15% since the start of the year, according to a company spokesman, so the cuts will leave the headcount higher than it was at the beginning of the year.

In his email, Musk said the layoffs primarily affected salaried positions and will not affect Model 3 production. Instead, he said that the cuts were made to job functions that, "are hard to justify today". The company will also not renew its contract with U.S. hardware chain Home Depot, which now sells the company's solar panels and home energy systems, though "the majority" of Tesla staff now placed in Home Depot stores will move over to Tesla retail positions.

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Up almost 7% earlier on Tuesday, shares of the company trimmed gains to stand 3.5% higher at $344 by early afternoon. That price target is about 10% lower than Tesla stock's recent prices near $332 per share. Employees working at Home Depot stores will have the option of moving to Tesla locations.

Tesla also said it was not renewing its residential sales agreement with retailer Home Depot in order to focus on selling solar power in Tesla stores and online.

In the letter, which is signed by Musk, Tesla employees are told that most of the "approximately 9%" of laid off workers were nearly entirely composed of salaried positions.

Tesla is ending its partnership with Home Depot and will remove its branded kiosks from as many as 800 of the home improvement chain's US stores by the end of the year. Tesla still has a significant need for production workers as it tries to reach Model 3 manufacturing targets, he wrote in the email. "We must continue to drive that forward for the good of the world".

What do you think the future holds for Tesla?