Tesla CEO Elon Musk told employees today that he and the company’s new CFO will personally review all expenses going forward in a ‘hardcore’ attempt to cut cost following massive losses during the last quarter.
Musk made the announcement in an email sent to all Tesla employees and obtained by Electrek.
In the email, the CEO argued that it is “extremely important” to “examine every expenditure at Tesla, no matter how small.”
He referenced Tesla’s last quarter during which the automaker lost $700 million.
Even though Tesla still had a $2.2 billion cash position at the end of last quarter and they raised another $2 billion, Musk said that it wouldn’t last that long with their burn rate:
“This is a lot of money, but actually only gives us about 10 months at the Q1 burn rate to achieve breakeven!”
In order to stop the bleeding, the CEO is implementing a new cost-cutting initiative that will see all the teams examine every payment, including “parts, salary, travel expenses, and rent.”
The CEO added that Zach Kirkhorn, Tesla’s new CFO, will review and sign every page of outgoing payment while Musk himself will review and sign every tenth page.
Musk described the effort as “hardcore”:
“This is hardcore, but it is the only way for Tesla to become financially sustainable and succeed in our goal of helping make the world environmentally sustainable.”
He said that employees have a few weeks to take ownership of expenses and find ways to make improvements.
It’s not the first time that Musk called for a company-wide effort to cut costs.
After Tesla first achieved a Model 3 production rate of 1,000 units per day last year, Musk turned his focus on cost and encourage everyone to make contributions.
At the time, the CEO said that very small efficiency improvements, like “better packing density or rearranging process flow to a fewer forklift moves”, can have a great impact if everyone works on it.
The new cost-cutting effort comes after Tesla laid off many employees in another attempt to reduce cost.
Earlier this month, Tesla also closed a massive $2.7 billion capital raise in order to support its operations.
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