Electric vehicle maker Tesla is cutting several thousand jobs across the company as it seeks to reduce costs and become profitable without endangering the critical production ramp-up for its Model 3 sedan.
On Tuesday, Musk tweeted that the company will cut 9 percent of its workforce as part of the restructuring and to "become profitable".
The move will not affect factory workers as Tesla continues to ramp up production of its lower-priced Model 3 compact vehicle. The rep also tells The Drive that the company is still hiring rapidly and that after this round of job cuts, Tesla will still boast more employees than it had at the beginning of 2018.
Shares in the company rose as much as 7 percent on Tuesday, although they fell back to stand just 3 percent higher on the day after Musk's announcement.
Model 3 production has been viewed as a critical bellwether of Tesla's near-term profitability. Year-to-date, Tesla's headcount is up roughly 15%.
Musk also announced that the company's solar panel unit has chose to end its agreement to sell via Home Depot stores so it can focus on sales in Tesla's company stores and online. His company began to roll out Tesla-branded selling spaces at 800 Home Depot locations earlier this year, building on a previous relationship the retailer had with SolarCity Corp., which Tesla acquired in 2016. "I'm deeply grateful for your many contributions to our mission".
The company is making the move now so it never has to do it again, he wrote. "It is very hard to say goodbye".
The "majority" of those workers will be offered positions in Tesla's retail business, Mr Musk added. In order to minimize the impact, Tesla is providing significant salary and stock vesting (proportionate to length of service) to those we are letting go.
"We are a small company in one of the toughest and most competitive industries on Earth", Musk wrote.