The electric car maker Tesla is sharply downsizing the residential solar business it bought two years ago in a controversial $2.6bn 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’s CEO, Elon Musk – include closing about a dozen installation facilities, according to internal company documents, and ending a retail partnership with Home Depot that the current and former employees said generated about half of its sales.

About 60 installation facilities remain open, according to an internal company list reviewed by Reuters. An internal company email named 14 facilities slated for closure, but the other list included only 13 of those locations.

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 a broader 9% staff cut announced earlier this month. “We continue to expect that Tesla’s solar and battery business will be the same size as automotive over the long term,” the company said in a statement to Reuters.

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 them 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 installation offices that the internal email said were targeted for closure were located in California, Maryland, New Jersey, Texas, New York, New Hampshire, Connecticut, Arizona and Delaware.

The company also fired dozens of solar customer service staffers at call centers 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 a week after production delays. The company faces investor pressure to turn a profit without having to tap Wall Street for additional capital.





