Tesla Cuts 3,600 Jobs As the Company Hemorrhages Cash
Electric car maker Tesla Motors will cut 3,600 jobs-the equivalent of 9 percent of its workforce-as the company desperately tries to stop hemorrhaging cash.
According the the Strib:
“Tesla would not say how much money the layoffs would save, but said no factory workers would be affected as the company continues to ramp up production of its lower-priced Model 3 compact car.”
“The layoffs come in engineering, sales and other front-office functions, but the company says the remaining workforce is large enough to accomplish Musk’s lofty goals of rolling out a semi, pickup truck and a new SUV in the coming years.”
One interesting fact is that Tesla has not made an annual profit in its 15 years of doing business, and it has posted only two quarterly net profits.
Up to this point, Tesla has kept itself afloat by wowing investors in spite of, and not because of their books. It also helps that the federal government doles out $7,500 per electric car in the form of the Electric Vehicle Tax Credit.
It’s really not surprising that an enterprise almost entirely dependent upon government subsidies and mandates eventually fails. As for now, it seems like Tesla is teetering on the brink.