Tesla Inc to close twelve solar facilities in nine states

Vastavam web: Electric car maker Tesla Inc’s (TSLA.O) move last week to cut 9 percent of its workforce will sharply downsize the residential solar business it bought two years ago in a controversial $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 – a sales and installation company founded by two cousins of Tesla CEO Elon Musk – include closing about a dozen installation facilities, according to internal company documents, and ending a retail partnership with Home Depot Inc (HD.N) that the current and former employees said generated about half of its sales.

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. The company said that cuts to its overall energy team – including batteries to store power – were in line with the broader 9 percent staff cut. The operational closures, which have not been previously reported, raise 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 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 company also fired dozens of solar customer service staffers at call centres in Nevada and Utah, according to the former Tesla employees, some of whom were terminated in last week’s cuts. Those employees spoke on condition of anonymity because making public comments could violate the terms of their severance packages. “It’s been a difficult few days – no one can deny this,” a Tesla manager wrote in a separate internal email, 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 company faces investor pressure to turn a profit without having to tap Wall Street for additional capital. Ending the Home Depot partnership, which allowed for solar sales in about 800 stores, is part of Tesla’s larger effort to absorb SolarCity into its high-end brand and sell through 90 of its 109 U.S. retail stores and its website, the company said.