Market Overview

Tesla Lays Off 9% Of Workforce, Declines To Renew Home Depot Contract

Tesla Lays Off 9% Of Workforce, Declines To Renew Home Depot Contract

Tesla Inc (NASDAQ: TSLA) CEO Elon Musk confirmed Tuesday that the company will terminate 9 percent of employees as part of a “difficult but necessary” reorganization.

What Happened

“Tesla has grown and evolved rapidly over the past several years, which has resulted in some duplication of roles and some job functions that, while they made sense in the past, are difficult to justify today,” Musk said in a company email that he later published on Twitter.

The cuts to be announced this week will primarily affect salaried workers and include no production associates, which Musk said ensures Tesla’s ability to achieve Model 3 targets. Notably, the firm will continue to hire in certain areas, particularly production.

Why It's Important

The layoffs are meant to advance management's previously stated goal to flatten management, reduce costs and drive Tesla closer to profitability. The latter goal will in turn address criticisms of Tesla’s financial health seen by Musk to be “valid and fair.”

The financial benefits may not be immediately recognized, though, as the company is providing “significant salary and stock vesting” to terminated employees proportionate to their tenures.

What's Next

Also in the correspondence, Musk announced the decision not to renew Tesla’s residential sales agreement with Home Depot Inc (NYSE: HD) in order to redirect sales to Tesla stores and e-commerce sites. Home Depot shares dropped marginally on the news.

Tesla fell about 2 percent intra-day after touching a high of $354.11 Thew stock traded around $339 at time of publication.

Related Links:

Musk Says Tesla Targets August Date For Updates Foundational To Autonomy

Baird Still Buying Tesla After Shareholder Meeting, Calls Energy Opportunity Underappreciated


Related Articles (TSLA)

View Comments and Join the Discussion!

Posted-In: Elon MuskNews Contracts Best of Benzinga

Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at