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February 8, 2019 12:15 PM, EST

Tesla to Cut 1,000 Jobs Starting March 20

Tesla Elon Musk at Tesla headquarters in Palo Alto, Calif. (David Paul Morris/Bloomberg News)

Tesla’s Fremont factory will be the hardest hit in California by the global job cuts the electric vehicle maker announced last month.

The company is laying off 802 employees in Fremont, 137 in Lathrop and 78 at its Palo Alto headquarters, Tesla said in required filings with the state Employment Development Department. The employees have been notified of the cuts, which will be rolling and begin March 20.

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Most departments are being affected by the slashing of an estimated 3,000-plus jobs, or 7% of the company’s workforce, but the ones with the most positions being eliminated are in sales and service, according to filings with EDD last week.

Tesla CEO Elon Musk said in announcing the job cuts Jan. 18 that they were necessary as the company tries to lower the price of the Model 3. Tesla’s newest model, its least expensive yet, is seen as critical to the company’s goal of offering electric vehicles to the mass market. The company has not reached its Model 3 goal price of $35,000, but Musk tweeted Feb. 6 that Tesla is getting closer as it cut the price of its base model to $42,900: “Model 3 starting cost now ~$35k (after ~$8k of credits & fuel savings).”

Musk also said in that announcement: “Tesla will need to make these cuts while increasing the Model 3 production rate and making many manufacturing engineering improvements in the coming months.”

Tesla model 3 sedan

Patrick T. Fallon/Bloomberg News

Despite that emphasis on production, manufacturing positions are not being left untouched. In Fremont, among those being laid off are 37 manufacturing supervisors, plus manufacturing engineers and technicians. In Lathrop, the bulk of the cuts is among production associates.

In Palo Alto, most positions being cut are in engineering and include hardware, software and data engineers.

These job cuts are the second big round in less than a year. Musk said Tesla increased its workforce 30% last year, which — based on its total of 37,543 at the end of 2017 — would have brought its global total to about 48,000 employees. Tesla announced job cuts last June that affected 9% of its workforce.

When reached for comment Feb. 7, a Tesla spokeswoman said affected employees outside California also have been notified of the layoffs. The company isn’t sharing those numbers, she said.

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