Tesla is cutting 9% of its workers as part of a reorganization designed to reduce costs and help the electric automaker become profitable, according to an email CEO Elon Musk sent to employees Tuesday and obtained by Fortune.
The cuts will not affect people working on production lines such as its Model 3 vehicle, which has struggled to scale up since deliveries began last year.
“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 wrote.
The number of Tesla employees has grown 15% in the past six months, according to insiders. It’s not clear which departments will be most affected.
Tesla has already started to notify employees, a company spokesman said.
The cuts are almost entirely made from salaried employees. Musk stressed in the email to employees that the cuts will not affect its ability to reach Model 3 production targets in the coming months.
“Given that Tesla has never made an annual profit in the almost 15 years since we have existed, profit is obviously not what motivates us,” Musk wrote. “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. That is a valid and fair criticism of Tesla’s history to date.”
Tesla is also not renewing its residential sales agreement with Home Depot. Musk told employees it plans to sell solar power and energy storage products in its own stores and online. The majority of Tesla employees working at Home Depot
will be offered the opportunity to move over to Tesla retail locations, Musk wrote.