Elon Musk says he has no choice but to reduce electric car manufacturer’s headcount

Tesla is cutting more than 3,000 jobs, or 7% of its workforce, after experiencing a year its founder, Elon Musk, said was both its most challenging and most successful.

The chief executive of the electric car manufacturer told staff on Friday that “the road ahead is very difficult” because its products were not yet affordable for most people and it was up against a big incumbent industry.

The California-based company had a torrid 2018 as it struggled through production problems with its mass market” Model 3 car and had to pay out $40m over tweets Musk made about taking the firm into private ownership.

Musk said it had also been a good year because Tesla had sold almost as many cars in 2018 as it had in its entire history and the firm had made its first profit.

However, he said he had no choice but to reduce its global headcount by 7% as the company had grown by nearly a third last year, which was “more than we can support”. The company has not published its precise headcount but Musk gave a figure of 45,000 in October, implying 3,150 job losses.

In a company update, Musk said: “While we have made great progress, our products are still too expensive for most people. Tesla has only been producing cars for about a decade and we’re up against massive, entrenched competitors.

“The net effect is that Tesla must work much harder than other manufacturers to survive while building affordable, sustainable products.”

Musk added that the cuts would fall at a time when the firm also needed to ramp up the speed with which it is building the Model 3.

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