Current and former Tesla employees allege that the company is trying to disguise cost-cutting measures as performance-related issues. On Friday, the San Jose Mercury News initially revealed that Tesla had laid off an expected 400 to 700 workers. That number is around 1-2 percent of its whole workforce.The majority of those let go were from its motors business, said individuals familiar with the issue. The mass firings started Oct. 7 and proceeded even after the news report, sources said.
Among those whose lost their jobs, some were given severance packages, while others are still waiting on separation agreements. Some fired representatives revealed to CNBC they were educated by means of email or a telephone call “without warning,” and were advised not to come into work the following day.”Seems like execution has nothing to do with it,” one Tesla staff member told CNBC under the condition of anonymity. “Those terminated were generally the highest paid in their position,” this individual stated, proposing that the firings were a cost-saving maneuver.
Throughout the performance review process before the mass firings, former staff members said Tesla’s general manager of service and operations, Karim Bousta, conveyed a notice saying reviews had been postponed so employees could concentrate on guaranteeing an effective rollout of the Model 3.
“Like all companies, Tesla conducts an annual performance review during which a manager and employee discuss the results that were achieved, as well as how those results were achieved, during the performance period,” the company said in a previous statement. “This includes both constructive feedback and recognition of top performers with additional compensation and equity awards, as well as promotions in many cases. As with any company, especially one of over 33,000 employees, performance reviews also occasionally result in employee departures. Tesla is continuing to grow and hire new employees around the world.”
Tesla, with a market cap of $59 billion, is famously secretive. Tesla compels employees to consent to privacy agreements, restricting what they can say in regards to the organization’s strategy and working conditions. As Goldman Sachs analysts and others have noted, Tesla has missed its objectives for creating Model 3s. It seems to be a matter of concern. An employment attorney with prior experience suing Tesla, Therese Lawless, said: “You wonder, if they had all these bad employees making cars, do you really want to buy a Tesla now? It’s very unusual to have a massive termination based on performance.”