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Tesla Chief Executive Officer Elon Musk told employees on Thursday that the company will run out of cash in 10 months if it can’t cut costs.
In a letter seen by Reuters, Musk explained that every expense will receive review in an effort to hit breakeven.
Tesla closed earlier this month a $2.7 billion offering of stock and convertible notes. That came a week after the carmaker said it lost $700 million in the first quarter, and is now down to about $2 billion in cash.
This isn’t the first time the company has sent out a red alert about expenses. An April 2018 memo also mentioned cost-cutting measures including a more thorough review of expenditures. Musk said the plan was to “cut everything that doesn’t have a strong value justification,” and any expenditure above $1 million for the next year was to be personally approved by him.
He echoed that financial diligence in the note reported by Reuters.
“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,” Musk said in the letter.
Unfortunately, cost-cutting has impacted the Tesla team in the past year. Tesla laid off 9 percent of its workforce in June 2018, then 7 percent of its team in January.