As reported by Reuters, Elon Musk has stated that unless costs are cut, Tesla will run out of money in 10 months’ time, despite having just closed a $2.7 billion offering of stock and convertible notes.
In an internal email sent to employees, Musk said, “This is a lot of money, but actually only gives us about 10 months at the Q1 burn rate to achieve breakeven!” He continued, “It is important to bear in mind that we lost $US700 million in the first quarter this year, which is over $US200 million per month. That is why, going forward, all expenses of any kind anywhere in the word, including parts, salary, travel expenses, rent, literally every payment that leaves our bank account must (be) reviewed.”
It’s not the first time Tesla has attempted to cut costs. The company laid off 9% of its workforce in June 2018, and then another 7% in January of this year.