Tesla Inc (NASDAQ:TSLA) is laying off some employees as part of a reorganization effort.
The new Tesla layoffs will have the company cutting 9% of its workforce. The majority of the people being hit by the layoff are salary workers. Tesla Inc CEO Elon Musk says that the reason for the layoffs is that the company currently has many duplicate positions.
According to Musk, the company taking the drastic action of laying off 9% of its workforce in the hopes that it won’t have to do this again in the future. He also notes that this will help the company with its goal of reporting an annual profit.
Musk notes that Tesla Inc has yet to report a yearly profit. He says that the company needs to start being able to do this if it wants to reach its mission goals. Cutting cost with the Tesla layoffs is one way to help it do this, reports CNNMoney.
The Tesla CEO also points out that the company isn’t just leaving those affected by the Tesla layoffs without any benefits. He says that these employees will receive “salary and stock vesting” that matches the time they spent with the company.
The Tesla layoffs were announced by Musk in a letter to the company’s employees. After the letter leaked, Musk posted it online via his Twitter Inc (NYSE:TWTR) account. These layoffs are going to start as early as this week.
TSLA stock was up slightly as of noon Wednesday.
As of this writing, William White did not hold a position in any of the aforementioned securities.