Tesla's massive employee lay-off provides management lessons

This week, car manufacturer Tesla announced that it would be cutting thousands of jobs in attempts to reach profitability.

Nine per cent of the company’s 40,000 employees will be affected. Elon Musk, Founder and CEO of the firm called the layoffs “difficult but necessary.” He added: “I also want to emphasize that we are making this hard decision now so that we never have to do this again.”

Whilst factory workers will not bear the brunt of the cuts – “the job cuts will be centred on salaried employees, not factory workers,” said Musk – the news has highlighted, once again, how Tesla treats its staff.

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With Tesla’s well-publicised production targets increasing pressure on Musk to meet them – it has not yet met its 2017 goal of producing a mass-market vehicle with Musk recently surviving demands, from activist shareholders, to be ousted as Chairman – it appears cutting headcount is seen as one way of reaching profitability.