Tesla Fires 600 Employees in California

  • Tesla cuts 600 more jobs from California as part of its plan to cut 10% of its global workforce this year.
  • Multiple departments and both senior-level and entry-level employees have been equally affected.
  • Growing competition from Chinese carmakers is a leading cause of the falling demand for Tesla cars, hence the job cuts.

Tesla decided to cut an additional 600 jobs at the company’s manufacturing plant and engineering headquarters in California – at its Fremont and Palo Alto locations to be precise.

The news comes after the company made a government filing about the layoffs in a Worker Adjustment and Retraining Notification, or WARN Act filing. It was obtained through a public record request. At the same time, Tesla also notified the California Employment Development Department about the same.

The latest round of layoffs will be affecting almost every department across the organization including factory workers, robotic engineers, and software developers. Also, top-level executives will be just as much in danger as entry-level employees.

Here’s a breakdown of the firings:

  • 378 people were fired from Fremont which is home to the company’s first manufacturing plant in the country.
  • 65 jobs were cut at Tesla’s Kato Rd. battery development center.
  • 233 jobs were cut at Palo Alto which houses the company’s engineering headquarters. Two directors of technical programs were also let go.
  • A lot of people involved in the designing and maintenance of Tesla apps were also asked to leave.

Recent Tesla Firings

This isn’t the first time the company has announced layoffs. In a separate filing last month, the company slashed 6,300 jobs across California, Texas (Austin), and New York (Buffalo).

Recently, Musk also fired the entire Supercharger team which included 500 employees and charging chief Rebecca Tinucci following an argument with her. Musk wanted to cut more jobs as usual but Tinucci was opposed to that idea. As a result, he ordered a mass firing.

However, reports suggest that the company has been quietly rehiring some of the people who were let go because it’s quite impossible to run the Supercharger network without them.

Also, some of its clients who signed up to use the superchargers were concerned about the firing of the entire team.

This shouldn’t be all that surprising because last month the company released an internal memo that said at least 10% of its global workforce will be fired which means approximately 14,000 employees are expected to be affected.

‘As we prepare the company for our next phase of growth, it is extremely important to look at every aspect of the company for cost reductions and increasing productivity’ – Elon Musk

Reason Behind Layoffs

Let’s look at some reasons why Tesla is bent upon a layoff spree.

Reason #1 – Falling Demand

The reason behind these layoffs could be the falling demand for Tesla products and increased competition, which is forcing the company to go through an organization-wide restructuring program.

For instance, the demand from its Fremont manufacturing unit, especially for older car models like Model S and X vehicles and Model 3 sedans, has significantly dropped – at least a quarter compared to last year.

Reason #2 – Increasing Competition

And all this is happening because of competition increased from Chinese manufacturers. People still want electric cars, but now companies like Nio and Xiaomi have entered the race.

And as we know, Chinese products are always somehow cheaper than US alternatives. This is forcing Tesla to slash its prices as well which in turn is stealing its revenue.

Reason #3 – Faulty Systems

And Tesla’s faulty autopilot feature isn’t helping its cause. In a report published by the NHTSA, Tesla’s autopilot was found guilty of 467 collisions and 13 major crashes. In fact, there are more than 40 investigations launched by the NHTSA against the company’s autopilot feature.

Just last month, Tesla had to call back 3,878 Cybertrucks after complaints of unintended acceleration.

However, Musk is making all efforts to keep Tesla’s demands afloat:

  • He recently visited China in a meeting with Premier Li Qiang to discuss the possible launch of Tesla’s FDS software and seek permission to transfer data overseas.
  • Musk is also trying his best to shift the focus of investors on other interesting projects such as his “Robotaxis”.

However, so far this year, Tesla stocks have already tumbled by 30%.

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