Tesla to lay off 7% of its employees, but expects to increase production

Predicting hard times for the near future, Tesla announced on Friday (18) that it will lay off about 7% of its workforce, in a move to increase productivity and become more competitive and relevant in the face of far more established rivals of the automotive and energy sectors. It may seem like an inconsistency, but the layoff wave is part of a larger plan aimed at increasing margins, billing, and profitability.

The layoffs accompany a news release earlier this week with the discontinuation of the cheaper models of the Model S sedan and the SUV Model X. In addition, in a press conference, CEO Elon Musk said he will end a loyalty program for customers who indicate other vehicle buyers. The benefits, such as six months of free recharging and maintenance and care services, were making the vehicles more expensive than the company would like.

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For the company, it's time to cleanse the fat and optimize the processes to, at the same time, abandon what does not work and focus on competitiveness with rivals. An internal cost cut also accompanies the wave of layoffs and changes in the work routines of everyone involved in the Model 3 production, at a job that begins next week and is expected to last a few months.

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