NEW YORK: Tesla’s Elon Musk is having a harder time keeping people employed than he bargained for eight months ago.
When the chief executive officer announced plans to dismiss about 9% of the electric-car maker’s workforce in June, he wrote in an internal memo that Tesla was “making this hard decision now so that we never have to do this again.”
On Thursday, Musk told workers more jobs will be cut as Tesla winds down most stores worldwide and transitions to online-only ordering. This is the second culling the billionaire has announced this year – he said in January the company had “no choice” but to reduce headcount by about 7%.
Musk, 47, didn’t specify in his latest email to employees how many jobs will be impacted by the shift to online sales and said some workers will transition to other areas of the business. He also wrote that he expects headcount will increase next year.
“This is a hard decision” but is “necessary to make our cars more affordable,” the CEO wrote, after announcing another series of price cuts for the Model S and Model X and the arrival of a US$35,000 version of the Model 3.
Alan Ochoa, a quality inspector who lost his job as part of the January cutbacks, said the termination changed his view of Musk.
“I used to think very highly of him,” said Ochoa, who worked for Tesla for four years. “For him to – with a single swipe on a keyboard – eliminate 3,000 people is pretty disappointing.”
Musk’s latest moves also rattled investors. Tesla shares fell 7.8%, the biggest drop in six weeks, to close at US$294.79 on Friday.