Tesla to cut around 3,000 jobs in order to make products more affordable

Tesla has announced that it’s planning to cut 7% of its workforce, possibly around 3,000 workers, in order to better compete against more established players in the market. According to the firm, it grew by 30% last year which is more than it can currently support and it will therefore “retain only the most critical temps and contractors.”

In the announcement, Elon Musk, CEO of Tesla, said:

“To those departing, thank you for everything you have done to advance our mission. I am deeply grateful for your contributions to Tesla. We would not be where we are today without you.

For those remaining, although there are many challenges ahead, I believe we have the most exciting product roadmap of any consumer product company in the world. Full self-driving, Model Y, Semi, Truck and Roadster on the vehicle side and Powerwall/pack and Solar Roof on the energy side are only the start.”

The move comes hot on the heels of an announcement by SpaceX last week that it, too, would be laying off 10% of its workforce, or roughly 600 people - a much smaller scaling back than the one about to take place at Tesla.

Going forward, Tesla is looking to produce a more affordable variant of its Model 3. It was pointed out that the cheapest model costs $44,000 which is outside the price range for many potential customers. Musk also cited a reduction in Tesla's U.S. tax credit which would further increase the price of its cars, making the firm’s situation more difficult.

It’s not clear what assistance those being sacked will get. Those laid off from SpaceX last week have been given two months pay as well as career coaching, resume help, and help with job searches to get them back into work.

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