Electric car maker giant, Tesla has delivered a catastrophic blow to their U.S. workforce on Friday. During a memo which was reviewed by the Wall Street Journal, CEO Elon Musk said the company will soon cut off its staff by 7%.
Even after they announced their first gigafactory outside the United States in Shanghai just about a week ago, Tesla told that it would hand over 3,000 of its 45,000-strong workforce to their leaving papers.
Musk announced the bad news to their employees in a memo, which read- “Tesla will need to make these cuts when it will increase the Model 3 production rate and will make many manufacturing engineering improvements in the upcoming months.“
This disastrous news has already reflected in Tesla share price which has gone down by 6.94% after the announcement was made. Tesla seems to be exploring solutions which will provide a workaround to the ongoing tensions between Beijing and Washington. The setting up a gigafactory in Shanghai will allow Musk to produce his electronic cars in the world’s largest car market.
The company will be able to get more models cheaper and faster, without having to pay tariff duties. This will provide Tesla with a significant advantage in the competition with other companies as well. The construction is on its way and Tesla will soon begin shipping their Model 3 cars to China starting this March at a much-reduced starting price of $72,000.
This price slash has been done to compensate the imposed additional tariffs which have been placed on cars that would be imported to China by the U.S.
Yesterday too, Tesla announced that it would start an early end of its customer referral program and the expense of adding it would simply be too much of a price to the carmaker’s vehicles.