On Tuesday CEO Elon Musk announced the automaker is reducing its workforce by 9 percent in an effort to cut costs and become profitable.
The cuts to be announced this week will primarily affect salaried workers and include no production associates, which Musk said ensures Tesla's ability to achieve Model 3 targets. Instead, he said that the cuts were made to job functions that, "are hard to justify today".
The executive noted that Tesla has never made an annual profit in its almost 15-year history and that profit is not what motivates them.
Tesla shares, which are up almost 10 percent on the year, rose on news of the job cuts. Employees working at Home Depot stores will have the option of moving to Tesla locations.
It wasn't clear what would be the result of "flattening the management structure", but layoffs were expected to be part of the plan.
Last month, Musk had hinted at a reorganisation but did not give details.
Musk said the cutbacks would not affect the company's ability to reach Model 3 production targets in the coming months.
The email from Musk said.
This latest corporate restructuring doesn't exactly come out of left field as a Tesla spokesperson points out that Musk had expressed intentions on shaking things up during Tesla's first-quarter earnings call. According to Bloomberg, this is the largest layoff in Tesla's 15-year history.
Tesla started selling solar panels and home battery packs at Home Depot earlier this year.
"Also notable is Tesla is not cutting production jobs at a time when pushing Model 3s out the door is a top priority". "I'm deeply grateful for your many contributions to our mission". Musk said Tesla is making the move now so it never has to do it again.
To those who are departing, thank you for everything you've done for Tesla and we wish you well in your future opportunities.