Electric car maker Tesla Inc’s move last week to cut 9 percent of its workforce is to sharply downsize the residential solar business it bought two years ago in a controversial US$2.6 billion deal, according to three internal company documents and seven current and former Tesla solar employees.
The latest cuts to the division that was once SolarCity Corp — a sales and installation company founded by two cousins of Tesla CEO Elon Musk — include closing about a dozen installation facilities, internal company documents showed, and ending a retail partnership with Home Depot Inc that the current and former employees said generated about half of its sales.
About 60 installation facilities are to remain open, an internal company list reviewed by reporters showed.
Photo: Bloomberg
An internal company e-mail named 14 facilities scheduled for closure, but the other list included only 13 of those locations.
Tesla declined to comment on which sites it planned to shut down, how many employees would lose their jobs or what percentage of the solar workforce they represent.
Cuts to its overall energy team — including batteries to store power — were in line with the broader 9 percent staff cut, the company said.
“We continue to expect that Tesla’s solar and battery business will be the same size as automotive over the long term,” Tesla said in a statement.
The operational closures, which have not been previously reported, raised new questions about the viability of cash-strapped Tesla’s solar business and Musk’s rationale for a merger he once called a “no-brainer,” but which some investors have panned as a bailout of an affiliated firm at the expense of Tesla shareholders.
Before the merger, Musk had served as chairman of SolarCity’s board of directors.
The installation offices that the internal e-mail said had been targeted for closure were in California, Maryland, New Jersey, Texas, New York, New Hampshire, Connecticut, Arizona and Delaware.
The company also fired dozens of solar customer service staffers at call centers in Nevada and Utah, said the former Tesla employees, some of whom were terminated in last week’s cuts.
“It’s been a difficult few days — no one can deny this,” a Tesla manager wrote in a separate internal e-mail sent to customer service employees shortly after the cuts were announced.
Tesla has been burning through cash as it tries to hit a target of producing 5,000 Model 3 electric sedans per week after production delays.
The firm faces investor pressure to turn a profit without having to tap Wall Street for additional capital.
The total number of cuts to the solar workforce remained unclear.
Some personnel at facilities closing down were being transferred to other sites, the current and former employees said.
SolarCity employed about 15,000 people at the end of 2015, but has since cut thousands of workers.
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