Tesla will close “about a dozen” solar installation facilities around the country as part of its recent layoffs, according to Reuters. Installation centers in California, Maryland, New Jersey, Texas, New York, New Hampshire, Connecticut, Arizona, and Delaware will be shuttered. Workers will be laid off or reassigned to other sites. About 60 similar facilities will remain open.
The installation centers were opened when Tesla’s solar panel wing, SolarCity, was still an independent company. Tesla sells home batteries and is developing solar roof tiles under its own branding, and since it acquired SolarCity for $2.6 billion in late 2016, it has worked to trim the solar panel provider’s operations (sometimes through layoffs) and better integrate them into its existing store experience. In a letter to shareholders at the end of the first quarter of 2018, Musk said the company has “increased efforts to sell energy generation and storage systems in Tesla stores,” hinting that further consolidation was in the works.
Tesla also announced that it was ending a deal where it sold its solar energy products at Home Depot. While the original relationship between SolarCity and Home Depot dates back more than five years, Tesla announced an expansion to this partnership in February. These changes came with layoffs at Tesla that cut 9 percent of the workforce, or more than 3,000 people, as part of what CEO Elon Musk has called a “difficult, but necessary Tesla reorg.”
A spokesperson for Tesla declined to comment on the specifics of the closures but said that the company expects Tesla’s solar and battery business to eventually be the same size as its automotive side. “One of the main reasons we acquired SolarCity was to use our Tesla stores to sell not only cars, but also Powerwall and Solar. 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. The reorganization that we announced last week does not impact this.”
In an email to employees, Musk said the decisions involving the “company-wide restructuring” were made “by evaluating the criticality of each position, whether certain jobs could be done more efficiently and productively, and by assessing the specific skills and abilities of each individual in the company.” Tesla’s automotive business has recently struggled to generate enough revenue to offset the production of the Model 3, the company’s first electric car for the mass market.
Tesla’s acquisition of SolarCity generated some controversy, as SolarCity was founded by two of Musk’s cousins, and Musk served as the chairman of the company’s board of directors while also running Tesla. Tesla shareholders eventually filed a lawsuit claiming that the Tesla board breached its duties by approving the merger. The case is still working its way through Delaware chancery court.