Tesla Plans Closure Of Multiple SolarCity Locations, Employee Lay Offs Imminent
As part of a previously announced company restructuring, Tesla is closing 13 to 14 solar installation facilities across the country. Bought by Elon Musk’s company for $2.6 billion, SolarCity locations in California, New York, New Hampshire, Connecticut, Delaware, and Arizona will be shut down.
While Tesla has not officially announced which facilities will be shuttered, a document indicating 14 planned closures was obtained by Reuters. An internal email, also obtained by Reuters, only mentions 13.
The company has not commented on how many employees will lose their jobs as a result of the SolarCity operations reduction. Earlier this month, Tesla did say it had plans to reduce its overall energy team by 9 percent.
Many solar customer service representatives have already been terminated. A former employee, speaking anonymously to Reuters, said the company fired dozens of workers last week in Nevada and Utah. However, according to the source, some workers were moved to other locations.
Tesla is also cutting ties with Home Depot. The DIY retailer currently stocks many of SolarCity’s energy products and accounts for nearly 50 percent of its sales. The deal with Home Depot was originally made before SolarCity was acquired by Tesla two years ago.
Without Home Depot, Tesla will push solar energy and battery products through 90 Tesla-branded retail stores and on its website.
“Tesla stores have some of the highest foot traffic of any retail space in the country, so this presents a unique benefit that is demonstrated by the growing number of Tesla vehicle customers who are also purchasing energy products through our stores,” said a company spokesperson, per The Verge.
EXCLUSIVE: Tesla’s latest cuts to the division that was once SolarCity include closing about a dozen installation facilities – documents https://t.co/vbvtjRmcni by @nicholagroom @sal19 @kristinacooke pic.twitter.com/HVzlv1syMV
— Reuters (@Reuters) June 22, 2018
The move to cancel Home Depot’s deal came very unexpectedly. In February, Musk announced plans to expand the agreement. Analysts with GTM Research believe the move by Tesla is a way to cut sales and marketing costs as retailers tend to take a significant portion of the profit.
While a marketing staple of solar energy companies, door-to-door sales of SolarCity products are no longer allowed by Tesla. The buying of leads and attending local events by salespeople is also now prohibited.
SolarCity was started by two cousins of Elon Musk. While Musk sat as chairman of SolarCity’s board, he made moves for Tesla to buy the company in 2016. Quickly after, Tesla shareholders filed a lawsuit alleging the acquisition should never have been approved. The case is still pending in a Delaware court.