Tesla to slash thousands of jobs in profitability drive

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In an email to workers on Tuesday, Musk said the cuts amount to about 9 percent of the company's workforce of 40,000.

The layoffs are "almost entirely" in salaried positions and won't impact Tesla's efforts to increase Model 3 production, Musk said. It's not clear which departments will be most affected.

According to sources familiar with the matter, there was a round of layoffs at Tesla that started on Monday and it is going to be made official by Tesla CEO Elon Musk today.

Following the news, Tesla stock climbed more than 6%.

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Tesla has never been profitable in its 15-year existence. "What drives us is our mission to accelerate the world's transition to sustainable, clean energy, but we will never achieve that mission unless we eventually demonstrate that we can be sustainably profitable".

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Musk's note also said that Tesla will end distribution of its solar power and home battery equipment at Home Depot and focus on direct sales instead.

In the email, he said the cuts are aimed at eliminating duplicate roles and he does not expect them to affect the firm's production ability.

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In May, Musk announced a "thorough reorganization" in a memo to employees. For almost all of its history, Tesla has put up losses while investing heavily in technology, manufacturing plants and an extensive car-charging network.

The front hood logo on a 2018 Tesla Model 3 electric vehicle.

The company did not say how much money the cuts would save.

Musk also announced that the company's solar panel unit has made a decision to end its agreement to sell via Home Depot stores so it can focus on sales in Tesla's company stores and online.

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Musk said the cutbacks would not affect the company's ability to reach Model 3 production targets in the coming months. But Musk has promised an acceleration of Model 3 manufacturing, which will allow the company to bring in a lot more revenue.

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