- Tesla has cut 600 more jobs from California as a 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 has 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 via a public record request. At the same time, Tesla notified about the same to the California Employment Development Department.
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 this year Tesla 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 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.
The quiet rehiring could be because some of Tesla’s clients who signed up to use its superchargers were concerned about the firing of the entire team.
All in all, though, the recent mass layoff shouldn’t be all that surprising because the company released an internal memo last month that said at least 10% of its global workforce will be fired in due course of time. This means approximately 14,000 employees in total are expected to be affected. We can expect more Tesla layoff news in the coming weeks!
“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
Reasons Behind Tesla Layoffs
Let’s look at some reasons why Tesla is bent upon a layoff spree:
1. Falling Demand
The biggest reason behind these layoffs could be the falling demand for Tesla products, which is forcing the company to go through an organization-wide restructuring.
For instance, the demand from its Fremont manufacturing unit, especially for older car models like the Model S and X vehicles as well as the Model 3 sedans, has significantly dropped—at least by a quarter compared to last year.
2. Increasing Competition
Tesla’s demand is falling because of increased competition from Chinese manufacturers. In case you’re wondering whether this has anything to do with the demand of electric vehicles, I’d like to clarify that people still want electric cars.
However, new companies like Nio and Xiaomi have entered the race, giving Tesla cars (which are more expensive than their Chinese rivals) a serious run for their money. This is also forcing Tesla to slash its prices, which in turn is hurting its revenue.
3. Faulty Systems
This one’s a biggie. Tesla’s faulty autopilot feature isn’t helping its cause in the slightest. In a report published by the NHTSA, Tesla’s autopilot was found guilty of 467 collisions and 13 major crashes.
In fact, there have been 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.
Despite the odds being stacked against Tesla, Elon Musk is making all efforts to keep the company’s demand afloat:
- He recently visited China for a meeting with Premier Li Qiang to discuss the possible launch of Tesla’s FDS software and seek permission to transfer data overseas.
- He’s also trying his best to shift the focus of investors on other interesting projects such as its ‘Robotaxis.’
Our Editorial Process