Tesla to lay off more workers

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Words: Nile Bijoux
21 Jan 2019

Another seven per cent of Tesla’s workforce will be laid off as the company continues ramping up production of the Model 3.

The layoffs are expected to affect around 3200 workers, with Tesla CEO Elon Musk confirming in a public letter that the company will only keep the most critical employees. "We grew by 30 per cent last year, which is more than we can support," he said.

Tesla came within weeks of bankruptcy last year as it went through production hell to hit the 5000 Model 3s per week milestone. It achieved that mark in July and since then the Model 3 has been one of the best selling cars in the US. In December, Tesla moved 25,250 Model 3 sedans, making it the 12th best selling vehicle overall.

The company even managed to turn its first profit in several years thanks to the Model 3. Musk said the four per cent profit after costs was a result of only making high-spec, high-margin versions of the Model 3, rather than the much-hyped $US35,000 entry-level model.

A key challenge going forward will be a federal tax rebate drop from US$7500 to US$3750. This will drop again to US$1875 from July, and will disappear completely from the beginning of 2020. The reduction is because the company has sold over 200,000 electric vehicles in the US. The lower-price Model 3 will be crucial to helping the company stay afloat.

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