Musk Tweets – Tesla To Eliminate Off 9% Of Workforce

Tesla

JUN 12 2018 BY ERIC LOVEDAY 165

Elon Musk took to Twitter to tell the world that Tesla is laying off approximately 9% of its workforce as it seeks to turn a profit or at least show the world its intention to eventually be profitable.

The first question that comes to mind is “will Tesla Model 3 production be affected?” Musk says no.

Here is the Tweet, followed by the revealing email sent by Musk to the Tesla workforce:

This is not the first time Tesla has taken a similar action in regards to laying off employees. In fact, a similar tact was taken in early May, but the reasoning was a bit different.

This time though we do have a firm 9% reduction figure.

Here are the financial highlights (or lowlights, if you prefer) from the most recent Tesla conference call:

Tesla was expected to report an adjusted loss of $3.26 a share on revenue of $3.142 billion in the quarter.

Tesla’s actual reported results are:

  • Revenue of ~$3.41 billion
  • Loss of $4.19 per share (GAAP)
  • Loss of $3.35 per share (non GAAP)
  • Net loss of $784.6 million

The automaker reports $2.67 billion in cash at end of Q1, down from $3.37 billion at end of 2017.

And now for that email, which was posted in its entirety by Musk himself.

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165 Comments on "Musk Tweets – Tesla To Eliminate Off 9% Of Workforce"

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Fool Cells

stinks people have to lose their jobs, but that is how the real world works. Sounds like Tesla is giving people a good package and the economy is booming so they should not have a hard time finding work which pays well.

Ocean Railroader

I’ve been applying for over 500 jobs over the last six years and I still haven’t gotten any job offers that pay higher then ten dollars a hour which is only thirty cents more a hour then I’m making. I have also not seen any super high playing jobs out there.

While at the same time I have seen would be employers get flaming mad when they learn I don’t have a million and one years experience. Also if you have ever pushed carts at a gerogery store you are considered a untouchable vermin in the area I live at as unfit do to anything else regardless of going to that waste of time and money known as collage.

CCIE

This is mean, but at some point people need to accept that they are the issue, not the system. Intelligence and luck are involved. But, being diligent, responsible, and having a positive attitude go a long way in the work world.

People who can’t make it through a low-cost bachelor’s degree program at a community/state school usually also have various issues performing in the workplace. That’s one reason that completing college is a favorable attribute.

I know you won’t accept this as constructive criticism, but you also need to work on your spelling/grammar. If you speak the way you type, then work on that too. How you present yourself to a potential employer is huge.

Mark.ca

+1
The other thing i want to mention is how many that complain about local conditions refuse to pack up and leave for better opportunities elsewhere. If you are not smart enough or don’t want to deal with the hassle of owning your own biz then move!

Ocean Railroader

The reason why I don’t move is the costs are very high. There are also areas I’m not attracted to due to their being to much traffic and stress.

The reason why I don’t try and start up my own biz is my current house is very land constrained. I have also tried several ideas for a business but ended up losing a lot of money. And I don’t want to risk my meager life savings.

Dave

I have no idea where you are at, but in the Seattle area every construction company I have ever heard of is hiring, even inexperienced people for general labor positions, and minimum wage is $15 per hour. If you can do even basic work, digging or sweeping, you will get way over $15

Derek

I second that. Pretty much country wide there is heavy demand for construction jobs. Carpenter, plumbing, electrical, HVAC, you name it, they are hiring. If they won’t hire you without experience, go to a 1 or 2 year tech school, then you would be immediately hired. A decade after that, you will be making at least 3 times what your making now.

Fool Cells

Agree. there is more to this story than being offered up.

scott

There is no housing in the Seattle area that is affordable. A person making $15, or even $20, won’t qualify for much, if anything. The average studio apartment in Seattle is $1400 a month. That means a person has to make $50,000 to even qualify.

Dave

Agree, Seattle housing is getting expensive. But there are other areas to live and commute. Heck if this guy wants to have no traffic, cheap housing and over $10 per hour… Try Cle Elum, WA, housing is cheap, there is rarely ever traffic, and the McDonalds has jobs starting at $13 per hour…

Robert Weekley

Probably similar in Tukwila, or Issaqua, too!

Ziv

Scott, I just hit Trulia and found a handful of updated studio apartments with brand new kitchens for $850-$900 a month in Ballard, Lake City and Bitter Lake. Obviously, I don’t know neighborhoods but the apartments all look pretty nice. I think 40 times your monthly rent is the minimum yearly income to rent in most markets, so 40 * 900 = $36,000. $3,000 a month is about $750 a week or $19 an hour, which isn’t chump change, though.
There were a lot more apartments at $750-$800 but they had older kitchens and didn’t look nearly as good, but they weren’t terrible. 40 * 750 = $30,000. So that is $2500 a month or $600 a week, or $15 an hour.
Seattle may be more expensive than it used to be but it isn’t terrible by Manhattan, San Fransisco or Hawaii standards. If you commute in from outside the city, I would bet you would get a better price.
Sorry for going into this much depth, not to mention off topic, but comparative living expenses have been coming up on my radar screen recently…

Robert Weekley

A Person, alone, working for $10 – $15 per hour, likely should not try to live as plush a life as someone earning $40 an hour, though! So, Rent a Room, Share a 2 Bedroom Apartment with a Room Mate, Stay at “The Y”, etc!

Robert Weekley

“A Person”, can rent a room! I have! I have partnered with 2 others, renting a room at the same place, when we had to move out, and found a 3 Bedroom Townhouse, and became the “Lead Tenant”, too! Life has its Uos & Downs!

I had 6 (SIX!) Jobs in 1987, 4 in sequence, plus 2 part time – evenings on one, weekends on other, until late in the year, when I finally got a bit better job, at $1.95 an hour more than my then previous main job, that I left to start at MDCAN (McDonnell Douglas Canada)!

Of course, I had training in that field, experience as a pilot and an experimental aircraft builder, and past employment in the field too, even the part time and lower paying jobs, and one that lasted 2 days, before I moved on!

Also, short of being an athiest, attending a Church, even in Seattle, he could probably find someone to help him get a start! Ideas, make the difference, for most things!

Shucks, even working Cleaning Houses, offices, etc, could be done for better than $10.00 an hour, I would think!

Karen

Same in SF Bay Area. Ridiculously low pay atvTesla.

Asak

It should probably be noted though that $15 an hour doesn’t go that far in Seattle.

Windbourne

In the Denver Basin, McD’s are paying 12/hr and general labor in construction is paying 16/hr.

Fool Cells

i see excuses

Rightofthepeople

As Dave and others point out below, construction is booming now and it is nearly nationwide. I work for a company that owns several ready mix concrete businesses around the country, and every one of them is desperately seeking to hire mixer drivers. This does require a CDL but many of our companies will help an otherwise qualified candidate acquire a license. Pay is typically $15 to $20 per hour, more in larger metro areas, plus good benefits. All we want is someone who is drug free (this eliminates 50% of the applicant pool) and is willing to show up every day and work hard (this eliminates another 40% of the applicant pool).

Ocean Railroader, if you meet those qualifications and are willing to learn how to drive a mixer truck, then just call your local ready mix concrete company and put in an application.

scott

Wow, $15 to $20 an hour to drive a concrete truck? I know people who made twice that twenty years ago doing the same thing. No wonder you are desperate for workers.

Dave

Ya. but most mixer trucks today have auto shift transmissions, and drivers who look and act like they are not “overly qualified”. I was on a job today that the mixer driver could not even back his truck up the concrete pump without getting out 3 times to see where he was. Pump operator was yelling at him… haha!

SJC

It is the system, lots of talented people begging for jobs.

Fool Cells

Talented in what? Women’s Studies? Anything STEM related will earn you at least 70k and that is if you are terrible. Have a clue and you are well into the six figures. Demand is through the roof.

scott

Totally, bro. Every teacher I know started at least at $70k.

S-T-E-M

Science

Technology

Education

Math

I believe a MS in Physics, or Computer Science, might net a person $70k to start. Anything, else, not so much.

Ziv

Scott, STEM stands for Science Technology Engineering Mathematics, no Education jobs will be allowed. But plenty of education is required. Odd that….

Robert Weekley

Aircraft Assembler, Aircraft Sealer, Electrical Assembler (Aircraft), or Aircraft Mechanic! Higher paying too, but good work ethic requred, desire to learn, and some decent hand-eye coordination, might get you a job at Boeing!

Dennis

The E in STEM stands for Engineering, not Education: https://en.wikipedia.org/wiki/Science,_technology,_engineering,_and_mathematics

scott

Working full time and going to school is hard time wise, but financially for many it is impossible. If you work full time you don’t qualify for much, if any, financial aid. Upward mobility does not exist for a vast swath of the United States population. People like to believe otherwise, but they are wrong. Several decades ago they may have been right, but today they are not.

CCIE

Most things in life are hard. I know a couple people who screwed around when they were young and then had to work full-time, maintain families, and go to college at the same time. It took them a while, but they ended up with valuable degrees (nursing, IT) and good paying jobs.

Instead of complaining and looking for shortcuts, people need to put in blood, sweat, and tears to better themselves. A lot of us did it before age 25 and now reap the rewards. Others wasted those years and have to pay for it later.

Robert Weekley

Yup! You are dead right! People have lost their drive, patience, and ability to think and find a solution for themselves! It “Everyones Falut, except their own!” Hence the term: Snowflakes! A little diversity, and they melt from the heat!

Cecilia B

This time it’s not about firing like last time, it’s about across the board engineers, production and all. South Africa style now USA style. You get yours screw the employees.

SJC

That is the reality, not the fantasy people want to believe.

Fool Cells

Where do you live? And you have zero marketable skills? When i was in college i waited tables part time and made way more than $10 a hour when worked out to a 40 hour week. There are jobs all over the place requiring little to no skills. Something does not sound right.

Ziv

While I was at university I worked as a bell man at a couple hotels, I averaged $500 a week over the course of a year with tips included at the poor one, $600+ a week at the nicer one. I knew bar tenders that made more but I didn’t like the hours.

scott

You’re just one of the many people who are no longer counter for unemployment purposes.

In the year 2000 over sixty-seven percent of working age individuals had a job.
Since 2014 that rate has fallen to less than sixty-three percent.

Ziv

I just hit the Bureau of Labor statistics and the numbers are kind of interesting. The employment to population ratio has oscillated a bit over the past 20 years and we are recovering, but we are still 4 points off where we were in 1998.
1998 64%
2003 62%
2007 63%
2010 58%
2014 59%
2018 60%

Another number that is really helpful for looking at the real unemployment/discouraged and not looking rate is the U-6.
1998 7.1%
2000 6.8% Record low year going back to 1995
2010 17.1% Record high year going back to 1995
2018 7.6%

http://www.macrotrends.net/1377/u6-unemployment-rate

Nix

There are definitely two economies. One economy in growth parts of the nation for growing job sectors, and another economy in stagnant parts of the nation in jobs that are being squeezed.

Robert Weekley

Trade School! Hands on Baby! Its about what can you DO, not What do you know!

gagaga

This looks very much like a company in crisis mode.
There has been much speculation in the last months, that Tesla for whatever reason cannot raise more equity, and is thus running into severe trouble. This message fits into that picture.

Darth

Doesn’t seem like that at all.

(⌐■_■) Trollnonymous

Look, a new name here.
Slob Klutz, is that you?!?!?!?!?

Salem

Looks more like the company is trying to streamline after the hasty build up of the Model 3 brought on some dead weight.

Dave

Yes, after growth you have to cut the fat. Tesla is really making a run at profit in Q3, this will be a big help… and they can put any severance payments in Q2, which helps

William L

Tesla in crisis mode? Nothing new, Tesla never made a annual profit in 15 years of existence. Although I do believe in Elon that Tesla will become profitable in the next quarter or maybe 2.

Re-org is very common, just no one cares when it happens with other company.

windbourne

huh.
You obviously have never worked for any large companies, nor a start-up.
This does not even come close to a company running into severe trouble.
If he was in severe trouble, he would be obtaining a lot more money, esp by selling off parts of the company.

So, you lose.

Pushmi-Pullyu

Yup. Every time there is even the slightest negative thing reported about Tesla, whether it’s an executive leaving or a complaint file by union activists or a layoff, the loose nuts crawl out of the woodwork to whine that Tesla is in trouble or that this is a sign it’s about to collapse or go bankrupt. Such drama queens!

No, it’s just another day at the factory.

JoeInTheUK

I worked for one of he worlds largest tech companies for 20 years. I survived 3 or 4 major purges / reorgs in that time getting rid of at least 5% of the workforce each time and numerous non announced smaller purges with 10-20% reductions but only in specific areas, perhaps a geography or a type of job function.
Point being this is all normal stuff and it’s only because it’s Tesla it’s any more than a 1 line in the news.

Bryan

Been working in Silicon Valley for 40 years, nothing unusual at all. I have been on both sides, someone staying behind and one of those leaving. If there are any early indicators I usually leave early. I never wanted the competition of the others getting laid off.

dan

Bryan, Apple didn’t have a single annual loss from 1977 to 1995. After 2 brief years of losses, Apple has again been profitable from 1997 to 2018. Whatever Silicon valley company you’ve been working for the past 40 years probably is not one of the “winners”.

MorinMoss

Apple is a longstanding tax dodger with over $250 billion stashed overseas

Gasbag

“Bryan, Apple didn’t have a single annual loss from 1977 to 1995. ”

….but they had multiple layoffs during that time span. They’ve been incredibly profitable during their more recent run and layoffs have been common during that span also. I think most people without a tech background don’t understand that layoffs are common in SV regardless of profitability. By your logic Apple isn’t one of the winners.

I’ve worked in the valley do over 35 years and have been thru close to 20 rounds of layoffs. I’ve only been laid off once but had a 50% raise in salary within two weeks (no options though.) usually I actually hoped to get the package. The best job security is having skills which are in demand and having a good reputation.

John Doe

About 4100 workers.. just hope they find new work soon.
I have family in the US, and the millenials have a hard time finding work. Huge dept from the university, still living at home.. in their late 20ies (and then some).
Should probably have studied science of some kind. . Engineering / robotics / mechatronics and so on.
Social science / gender studies / art. . Not the best chance to get a job. But even he who studied programming har a hard time, due to no experience, a lot of competition and an ever changing field.

BoltUp

With unemployment at the lowest its been in decades, I don’t expect it will take people long to find new work, the pain will be in moving to a new location for that work.

Ocean Railroader

The reality is the cost of living along with the hideous traffic and rents in the areas with all the jobs are what is not making me want to go move to some of these so called happening areas.

I also have spent the last five to ten years looking for better paying job above ten dollars a hour and where you don’t work 80 hours a week and that legendary job is a myth that kind of job doesn’t exist.

Mark.ca

There you have it! You are your own worst enemy. I moved to CA for better jobs and it was worth it.

Asak

If you have a skill that’s in demand in CA, like something in the tech industry then it’s no doubt a good move. I really wouldn’t recommend someone working for $10 an hour to move to CA with our high cost of living. That’s probably a bad idea.

What makes sense for someone in a given set of circumstances may be totally idotic for someone in another set of circumstances.

Fool Cells

sorry, do not buy it.

Robert Weekley

Work the 80 hours a week! Make some money! Learn a New Skill! Work 60 hours a Week! Learn another new skill! Work 50 hours a week… Etc!

John Doe
Most of them got jobs, but low paying jobs, where the university education is not used – and the pay is not enough for them to pay the student loan AND pay for living costs.. so they live at home. Outsourcing have been a problem for some too. In one family the dad worked as a highly paid engineer for HP. His wife was a customer service manager, and their daughter was in sales and the son worked in logistics at a distribution warehouse. First customer service was outsourced to India, then engineering was outsourced to India too. They could hire 6 well educated engineers in India, for the cost of an average HP engineer in the US. Then online orders, web apps and so on reduced sales, some were outsourced too. Then storage/distribution was located in larger units, and most was moved closer to the manufacturing sites in now cost countries. . . All this during pretty few years. They have not gotten their jobs back, and the new jobs are cheaper. The engineer got a job for å company adding more rubber on used casings.. can’t remember what ut is called. . Retread or something.. anyway. His wife… Read more »
Rightofthepeople

First you said, “They used to have 5 cars, hire people for gardening, cleaning and used to eat out several times a week. When they have less money to spend, they offer less work/income for others.”

Then you followed that up with, “…trickle down economy does not really work well.”

You realize those two statements are at odds, right? The trickle down affect is exactly how you described it in the first statement. When people have more money (as a result of tax cuts or wage increases, etc) they tend to spend it, and they typically spend it on things (like gardening and cleaning services, eating out more, etc) that contribute to the income of other people. More economic activity generates a need for more hiring, providing income for even more people. The rising tide absolutely lifts all boats.

scott

Except when it doesn’t. The United States is quickly approaching third-world levels of economic inequality. Economic growth doesn’t share the properties of water, and people are not boats.

Asak

The reason “trickle down” economics doesn’t work is because the concept involves giving money to the very top where it’s not true that more money equals more spending. If you already have plenty of money to cover your spending then additional money is more likely to simply be saved.

A group of working people, even high paid ones like engineers are not the level targeted by trickle down economics. Instead it’s focused at the very top where the effect is extremely limited (since really it’s just an excuse for tax cuts for the very wealthy and even proponents probably know it doesn’t actually work, but it makes a good sales pitch).

Economic policy focused on getting more money to middle income people can be effective, but that’s not usually what’s described by the term trickle down economics.

John Doe

It may look like it is morning, at least with a large middle class, og the pay is fair.

It has probably never been so few people owning so much of the land, companies and so on in the US. A huge percentage of the population have next to nothing, and they will stay that way.

Take Apple, and their billions in tax havens.. they borrow money to pay for stuff.. and lets say the boss of Apple.. he can have 5 TVs in every room, buy 10 new paid of pants every day – and it will still be small numbers, compared to what a middle class can buy.

A company that does the production locally, and pay a normal wage . . That will make a middle class.

As for the gardener and the cleaning lady. . They made minimum wage, no benefits.. That is not trickle down. . That is table scraps. You can excist on minimum wage – but you can not really live on it.

Look at the purchase power before Reagan, and compare it to now.

scott

Wages are at their lowest in decades. Lots of jobs, but few which pay a living wage.

The Civil Labor Participation rate in 2000 was above 67%.
The Civil Labor Participation rate today is below 63%.

Nix

Congratulations, you’ve identified the economic impact of the Baby Boomer generation retiring. The largest influx of retirees ever in US history, at the same time lifespan after retirement is hitting record highs. Retirees used to live in single digit years after retiring, and are now well into the double digits on average. All while the number of people retiring each month is a full order of magnitude larger than 20 years ago.

Windbourne

Yup. So many idiots screamed that O was doing a horrible job with the economy, while growing it steadily. Right extremists would point to Participation rate, while ignoring the facts about baby boomers. And here it is now, at the same rate.

The real issue are the wages. We really need a minimum wage that will provide a living wage for 1.5 person (i.e. mom/child). We had that back in the 70s. Not anymore. Need to bring it up and then boot a large number of ppl from the food stamps, etc

Dave

What?? If you are healthy, have any drive at all, and enough intelligence to use a smart phone, you are working in the USA right now..

Microsoft is paying 6 figures to kids right out of school now, no real experience…

Assaf

Those kids right of school would be the top of their class in a top-demand major in a top university, so way to construct a straw man.
Not everyone has had the shoulders to stand upon (or the far less common super-high natural drive and talent) to get there so quickly.

Bottom line, 60 years ago if you did ok in high school and stayed out of trouble, you could get a decent union job for life. Often, ironically, in the auto industry.

Nowadays… we’ve built a tough world for milennials and post-milennials. Not to mention anyone older who’ll get laid off.

Dave
haha! Yes, I think the world is tough for millennials, but because many of them grew up so entitled, and never learned about work ethic, or how to survive tough times. My kids do not have this kind of life, they have fair rules and certain expectations, everything is earned… I tell you, they have it much easier then I did growing up. BTW my son graduated Stanford, not the top of his class, and got the 6 figure job at MSFT, he has been there for a year now, and tells me it is not going to be hard to advance as so many of people do not want to work hard. They roll into work at 10AM, and by 4 or 5PM, are ready to go play video games and smoke pot. My son is just like me, up at 5 AM every day and ready to go when the sun comes up. He remembers the little sayings I repeated to him since he was a child… “Leaders come early, and stay late… ” “Only look at the people who are where you want to be in life, as an example to follow” “if you want to hang… Read more »
KumarPlocher

Funny that with all your knowledge, you never learned that generalizing about entire generations of people is lame.

Dave

I am not generalizing… I said many… I know many other parents who have done a fantastic job instilling values in their children, but there is quite a lot of the opposite as well.

Rightofthepeople

Well said all the way around Dave. My kids (19 and 16) are in the same boat as yours. They have it much easier than I ever did, but my wife and I still make them work hard for what they get and we are generally much harder on them than most of their friends’ parents are. Our kids aren’t scared of criticism or hard work, they know what is expected of them, and they know what the consequences are if they fail to meet expectations. They also know we love them unconditionally. My wife and I often joke that our kids (and those like them) will rule the world someday, because most other parents raising kids today are raising a generation of (crude discription of female genitalia).

Dave

haha! I had to laugh at your last line first. 100% true! Everyone gets a ribbon nowadays.

Its good to have the kids earn things themselves at a young age, I think that builds an unbreakable confidence.

Fool Cells

see the same thing where I work. And the people who are the worst at work, are the first to complain about not getting a big raise or a promotion.

Dave

Thats usually the way it goes…

scott

I’m happy for you that your son has decided to devote his vast talent to making mediocre and frustrating products for the masses. Cheers.

Dave

I am actually quite proud of him, he is just starting his career, who knows where he will go long term. I am just glad that he is not wasting his career working for me, pushing dirt back and forth every day. Microsoft is a pretty good place to work, good pay, and awesome benefits, at the same time there is lots to learn.

Windbourne

Actually, MS is NOT a good place to go to build up reputations.
Many in the tech field do not want anybody from there, since most are inept.
But good luck to your boy.

scott

If you’re between 25 and 40 you are golden. Get sick, get canned.

Fool Cells

never ceases to amaze at how many people have endless excuses as to why they are not making tons of money. There is so much opportunity out there, it is nuts.

Ocean Railroader

I find this a joke the reality is not everyone can do complex mathematics or robotics or computer programing.

(⌐■_■) Trollnonymous

“reality is not everyone can do complex mathematics or robotics or computer programing.”

The reality is, if you can’t do that in this day and age, you better be happy with the low pay that you can get/find.
Sometimes you just have to bite the bullet and take the low paying job till a higher one comes up.

https://www.glassdoor.com/Hourly-Pay/In-N-Out-Burger-Hourly-Pay-E14276.htm
That’s $2 more than what you’re looking for.

Ocean Railroader
I already work at a grocery store I was told to go to collage and I did go to collage so I won’t flip burgers or bag the rest of my life but. What I’m learning is if you touch a bagging rack or do a cart round up in a parking lot would be employers see you as a baggier the rest of your life. Also in my part of the county most of the new jobs you think would pay $40,000 a year in fact are lies that pay lower then I’m currently making s a bagger as if it’s a sick joke. What really killing things is the cost of living such as keeping the bloody car on the road is so high almost all of my low wages are going to keeping the car running and insured. I really think once the old 60 to 80 people die off who had all the retirement benefits and middle class wages once they die off there will be almost no way my generation will keep the pig floating over the gravy anymore and it will sink. But if a plague comes or a super flu it would put… Read more »
Fool Cells

now i know you are full of BS.

CCIE

This attitude is what scares me the most about the loss of manufacturing jobs in the US. It used to be that a relatively unintelligent and uneducated person could find unskilled work that would pay enough for them to survive. Few of those jobs exist anymore. Now those people get bitter and blame others for their issues. Bitter poor people have little to lose and are dangerous to society as a whole.

Windbourne

and what did you get your degree in?

Lucinda

No mostvdidnt have retirement benefits because companies got rid of them in the 80s and replaced with 401k plans. Phasing out except in giov’t, state jobs. Utilities have pensions still butbtgen again, they get more pay if they work high skilled jobs. Do you know Tesla only offered 2 month severance pay to the laid off 9% once? That’s it.

Lucinda

There are other jobs besides tech and coding. Those Inknow who code bodies are like ptretzels and are in constant pain. This is in the SF Bay Area not at GiihkevirvFB but certainly Apple.

Dave

Not sure what you are talking about, I see help wanted signs up all over the place… Every construction company I know of needs workers, even low level laborers that do not need specialized skills, and the rate of pay is not bad…

Ocean Railroader

I’m saying that there is not going to be a future anymore of people making enough money to keep the current system going.

In terms of the help wanted signs they have them all over the place in my home town. I even went to a job interview today for a job that said it would pay a lot but they lied big time.

Fool Cells

precisely why we need to gut the government. All the “free” stuff actually costs a lot! Who would have thought?

scott

What jobs do you think require a person to do complex math?

Windbourne

banking. finance, military, engineering, farming, manufacturing, etc.
Basically, all do, except for low end ppl that do not lead.

Gazz

If the company is expanding 9% seams very high. Can’t these people be moved to the gigafactory?

windbourne

oh, I suspect they will be offered jobs in other locations.
However, how many will move? Not many.

Bryan

Probably not. The GF is primarily a production facility. As was stated non of these positions are in manufacturing.

Nix

These are professionals losing jobs, people like electrical engineers, etc. And everybody knows not to ever let EE’s near power tools!!! LOL!

CIO

Should do wonders for quality – NOT.

Shaun

Production staff are not part of this.

Dave

No but service and sales are hammered…

jelloslug

None of those people are salary.

windbourne

I suspect that some WILL be let go. Keep in mind that they just did a massive robotic upgrade. 6 aircraft of equipment is going to be a LOT of function.

Mark.ca

Read the email, dude!
…”no production associates were included”…

windbourne

why?
What does quality have to do with sales ppl or with extra manufacturing that will be replaced by robotics?

Pushmi-Pullyu

Critical thinking is obviously not his forte.

(⌐■_■) Trollnonymous

We did that when we got our efficiency up and all the pick-and-place machines were online 24/7.
We released the temp/contract workers.
Chances are, Tesla will be releasing contract workers. That’s what every company and government agencies do.

Assaf

This is above and beyond contract workers. This is 9% of actual Tesla employees. And if factory jobs are (almost) off-limits, it’s a pretty big chunk of employees. If that includes, e.g., engineering jobs supporting the factory – and sounds like it does – it’ll hurt the ramp.

Dave

I think it will hurt future product development, getting rid of designers and engineers. I am sure they will hold onto the most talented ones, just cutting the fat…

God/Bacardi

How many contractors/sub-contractors were lost?

najeeb Ullah

Now that is fuked up

John

Nah, but what is blanked-up is your language on an electric car forum.

(⌐■_■) Trollnonymous

I’ve been worse………….LMAO

windbourne

how so? This is normal.

Dante

I think one of the issues here is that these people are not being fired because they did something wrong per say, it’s because someone decided after the fact that the company hired unnecessary people for unnecessary roles. To put a human face on it, someone applied for a job at Tesla, got it, moved their family to Bay Area, worked ridiculous hours during “production hell,” and then was laid off and left to pick up the pieces.

It most certainly sucks and companies should have enough respect for the people that they don’t hire and then decide that they don’t need the position, but it isn’t the end of the world. I support the transition to sustainable transportation and I would love to be part of the process, but if I really think about it, Tesla is losing a lot of money and something like this was inevitable. Maybe things will change when they reach profitability.

To Najeeb Ullah:

To be honest, I would rather work for someone who thought layoffs were “fucked up” than someone who thinks they’re great so keep being you.

Pushmi-Pullyu

Typical Tesla basher, trying to make out what’s perfectly normal business procedure as if it’s “bad” or “abnormal” just because Tesla is doing it.

Laying off the lowest-performing 9-10% of a workforce is perfectly normal at any sizable business. In fact, what’s abnormall here is that production workers are not part of the layoff.

But I suppose you can find some way to spin that to sound bad, too. 🙄

Dante
First of all I’m not a Tesla-basher and I promise you that everything I will ever say will be true to the best of my knowledge. I would describe myself as a Tesla fan, but that doesn’t mean that I can’t empathize with people being laid off. My only other comment so far was a request that the April estimate for Model 3 deliveries be revised upward. Second of all, there is no evidence at all that this is a performance review and there is a lot of evidence that entire positions are being eliminated in a restructuring. That means that no matter how you performed in your position, you’re getting laid off because management decided that the way they structured the company was itself a mistake. There may be some performance-related separations mixed in there, but the letter itself doesn’t say anything about it. Thirdly, no companies don’t normally lay off 10% of their workforce in routine performance evaluations. Again, there is a lot of evidence that this is happening because the company is losing money and that the company finds it critical to show a profit in the next quarter. That’s not an industry-wide situation. Finally, whether or… Read more »
Pushmi-Pullyu

“Now that is f**ed up”

Not only egregiously vulgar and sadly uninformed, but you can’t even spell a four-letter word.

“…someone with your qualifications would have no trouble finding a top-flight job in either the food service or housekeeping industries.” — Dr. Peter Venkman, “Ghostbusters”

leafowner

A lot more people are needed for ramp-up, trouble shoot and launch. It seems as if most of the Model 3 issues are behind. Surely they will need more people for the Semi & Y — but they need to show some profit first.

BTW – the Model 3 is an awesome vehicle!

Mark.ca

It clearly say that they are not cutting production workers.

Dave

Wow, I think most of these are manager, salesman, and service people, many at service centers, I wonder if service will be impacted? And Tesla was never what I consider a strongly managed company. Interesting…

Mark.ca

I told you that you are only right 2 time a day…
I bet they are not service people, that’s what they need more of.

Ocean Railroader

To the biggest worry with Tesla is if they have a defect or hidden malfunction in the cars coming out of production and they need to fix them fast.

Mark.ca

And an IT engineer would help with the blue collar work? Id that your base theory? They are not cutting production workers, it’s right there in the email.

HVACman

Did we ever hear how the “barnacle” contractor purge went? Musk made the threat, with specific vouching requirements, but I don’t think we learned who or how many were actually canned.

JyChevyVolt

9% is probably former Solar City employees.

Dave

Yeah, that may be true… I did not think of that

Nix

Yes, this was actually mentioned. All the sales tables in hardware stores are being shut down in favor of solar sales done in Tesla stores. Not all the former hardware store sales folks will transition to Tesla store sales locations.

Doggydogworld

Finally someone gets it!

They deployed 76 MW of solar last quarter, down over 60% from the peak. They cut out big chunks of that business without cutting a proportional number of employees. Until now.

Assaf

Not good. Even Musk himself says this is not good. So please don’t try to sugar-coat this. And yes, it can hurt the Model 3 ramp.
For example, engineers supporting production (which is a job I did at Intel) are salaried staff. And whenever there’s a clusterf**k on the floor halting production, it’s usually engineers who lead the task of figuring it out and getting the line back up again.
Not to mention getting the Gigafactory up and running. That is a classic engineering endeavor.

Dave

This does tell me Musk is seriously trying to engineer a profit in Q3, which is good, hard decisions had to be made to right the Tesla ship. I just wonder how sustainable this profit will be and how moving forward Tesla can continue the product development pace?

Dan

9% is too few! People don’t realize how much overhead these Silicone Valley companies have! They can afford to keep them simply because the collusion with Wall Street to waste investor’s money. Tesla subcontracts many important parts out to suppliers. All it needs is vehicle integration and initial design staff, the robots only need operators. Soon Musk is blowing money away like crazy.

Ambulator

Silicone valley? Where they make sex tapes? What is wrong with you?

scott franco

Silicone valley is in Hollywood. Silicon Valley is north of that.

Mark.ca

Hahahaha!
You get a cookie for that one!

(⌐■_■) Trollnonymous

“Tesla subcontracts many important parts out to suppliers.”
No sh1t Sherlock!
Everyone does this.

arne-nl

“Tesla subcontracts many important parts out to suppliers”

In reality, they’re making more stuff in-house than most of the major car manufacturers.

windbourne

great letter.
One thing that I noticed is that they have already made the choices of where ppl are going.
That is not a bad thing. Normally when CEOs pull this kind of BS, it comes down to politics. Hopefully, Elon did things differently.

Terawatt

A “tiny” company with $1100 million a month of revenue and … 20,000 employees..? (Of course they are small compared to many car makers. But it’s not exactly small business we’re talking about here!)

Sad for those who lose their job, no doubt. But probably a sensible move.

Troy

by mfg output they’re about 10% of Mitsubishi now, which itself is a small-fry in car manufacturing.

If & when Tesla triples their output they’ll make the top 50, passing Lada and Mini.

arne-nl

Mitsubishi quarterly revenue is around $ 18 B, BMW $ 28 B, Ford $ 41 B. Whether or not Mitsubishi qualifies as ‘small fry’ is debatable. Tesla Q1 2018 automotive revenue was 2.7 billion. So they’re more like 10% of BMW, not Mitsubishi.

The value of these kind of observations is limited since Tesla is growing so fast. We all know deliveries of Model 3 are growing fast and will cause automotive revenues to roughly double over the next few quarters.

But Tesla leads in the segment that matters. There is near universal consensus that the the world is switching to EV’s. So it may be true that in total revenues Tesla is still very small. But what is the value of high sales in ICE vehicles? What was the value of chemical film know-how and revenues for Kodak when the switch to digital photography started? In EV sales, Tesla is the one to beat and that will remain so for the forseeable future. (look for example at Hyundai having trouble ramping production of the very popular Ionic due to battery constraints, and GM is not producing many Bolts/Ampera-e’s).

theflew

Tesla is leading what amounts to a very small revolution. The model 3 will sell more than the S/X, but it will be a very small dent in traditional auto sales. The big guys have to get involved if EV are really going to grow to a meaningful percentage of auto sales.

If GM could make 200k EV right now could they sell them and at what price? The sweet spot for auto sales is $20k-$25k. The model 3 while it’s a nice car might only be able to do 100k-150k sustained sales a year. And maybe less giving the market doesn’t like sedans right now, especially $45k+ sedans.

Pushmi-Pullyu

@staff:

“In fact, a similar tact was taken in early May…”

My inner Grammar Nazi says that should read:

In fact, a similar tack was taken in early May…

* * * * *

In this context, “tack” means “direction”, a sailing term.

Ambulator

Good point. I’ll try to remember that.

Pushmi-Pullyu

I seem to recall a post from Nix that said companies typically lay off 9-10% of their workforce every year, due to individual under-performance. So, apparently, what’s odd isn’t that Tesla is doing this; what’s odd is that Musk thinks it’s appropriate to tweet about it every time Tesla goes through what should be just a normal part of every sizable company’s hiring-and-firing cycle.

Nix

That number includes voluntary turnover (people changing jobs on purpose, retiring, etc). 9% layoff is significant, but not outrageous. Some argue that companies should have at least some level of reduction in workforce every year, like Jack Welch:

“Back when he was running GE, Jack Welch famously argued that leaders should fire the bottom 10 percent of their workforce each year, as part of an orderly continuous improvement process.”

https://www.inc.com/paul-b-brown/should-you-fire-10-of-your-employees-every-year.html

I would be worried if Tesla had also frozen hiring for the last year, and then announced layoffs. But that isn’t the case. Tesla has actually been on a hiring binge over the last year, so some level of correction isn’t a sign of financial hardship as much as a signal of leaner operation and better alignment of the workforce vs. the tasks in the pipeline.

Bunny

Nikola is hiring in Arizona.

Pushmi-Pullyu

Not a company any sensible person would want on their Résumé! If that’s not clear already, it will be before long.

ModernMarvelFan

This just means that chances that Tesla will make a profit in Q3 and Q4 just got much higher….

Those “cost cutting” effort will make the Model 3 cheaper by reducing overhead and make it more likely to turn a profit which should boost stock price. BUY TSLA NOW!!!

Nix

Tightening of workforce in otherwise growing companies have traditionally been rewarded by higher stock prices by the market.

There is so much going on with TSLA right now, it will be hard to isolate just this one input to the price, but it certainly is up.

Dave

Cost cutting does not make the Model 3 cheaper, unless the cutting is in the production system which this layoff is not. This will have no effect on gross margin, but this will help Tesla to control their industry worst SG&A cost per vehicle.

Don Zenga

Large company’s that sell between 7 – 9 million vehicles like Ford and GM employ 200,000 and 180,000 workforce.
For a small company like Tesla that makes only 100,000 vehicles / year which is just above 1% of those big companies, the 30,000 workforce may be a lot.

Probably that’s the reason they are laying off. I hope they will rehire many of them as the production increases and new models are added.

I wish all those laid off employees get a good severance pay and also jobs quickly since they worked in the most innovative company in the World.

Nix

What car maker builds 7-9 million cars where the majority of their sales have been in the $75K to $150K range? More expensive cars have higher numbers of hours in labor.

Comparisons like that never work, because of many factors. Not the least of which is that it excludes the entire sales force for those car makers, while Tesla employs their own sales force. Not to mention their energy side of the business.

With that said, yes, good luck to those losing their jobs.

arne-nl

Your comparison has little value since Tesla is growing so fast. The workforce is sized for the Model 3 which will increase deliveries to more than 300k/year.

theflew

I have a hard time believing Tesla will ever sale 300k model 3’s a year. It’s just the wrong car at the wrong price right now. Look at BMW their 3 series sales are falling, but their x series sales are growing at a faster rate.

arne-nl

I was talking 300 k Model 3 + S + X. And don’t forget there is a world outside the US. In Asia and Europe the market is still more in favour of sedans. Although it is changing. The Model Y can’t come soon enough.

(Personally I hate SUV’s and wouldn’t care if Tesla made one or not, but, well, the other manufacturers have talked people into buying these oversized, expensive vehicles they don’t really need and that has become/is becoming is the preference. And so Tesla will have to follow.)

Asak

I’m not sure that doing away with the contract with Home Depot is wise. Why exactly did Tesla buy Solar City again? Just to do away with all of their business?

Pushmi-Pullyu

I’m not at all sure that Home Depot is the best place to sell Tesla’s upscale solar roof tiles. Given the very pricey, exclusive market they’re aiming at, wouldn’t it be better to have kiosks at places like golf courses and Starbucks?

bro1999

That’s exactly what people popping into Starbucks for a coffee want…to buy solar before going to work. Riiiight. Lol

Ziv

Well, it isn’t like Starbucks coffee is all that good. I just go there to use the wifi and the toilet.

Dave

They were selling regular solar panels at Home Depot, and it is a good way to get the Tesla name in front of homeowners.

I talked to the guys at my local Home Depot, but they were idiots, I told them I was looking at Panasonic solar panels for my new house, and first they tried to tell me they were the same thing, but when I came back with the specs, they told me Panasonic is wrong, and the Tesla cells are better. Haha! Tesla wonders why people are skeptical??

BTW, the Panasonic cells, are cheaper then Tesla, and have higher efficiency ratings, and optimal output.

Doggydogworld

“Why exactly did Tesla buy Solar City again? Just to do away with all of their business?”

That’s basically it, yes. SCTY had to shrink 60-80%. Doing that as an independent company would have forced bankruptcy, severely damaging Musk’s reputation as a techno genius. The damage would have spilled over and affected Tesla. Instead, Tesla bought SCTY and has been quietly winding the business down.

Nix

Tesla bought Solar City for the Solar Roof product, for Solar City’s factory, for lowering Tesla’s cost for panels on the Gigafactory and charger locations, and for Solar City’s agreements with Panasonic who also happened to already be a major Tesla partner.

Whether the Solar Roof product manages to dwarf Solar City’s old business plan in the long run is yet to be seen. But the reality is that there is a HUGE market consolidation well over-due in the solar panel market in the US. The solar panel industry is at a point in maturity where every single new industry sees a smaller set of market leaders differentiate themselves from the pack, while laggards are absorbed.

We are now finally seeing the results of reducing Tesla’s costs for solar panels, with more announcements this year of Solar being installed at Tesla locations. So that part is indeed paying off, cutting Tesla’s energy costs over the long run, making their profits on cars better in the long run.

TwoVolts

The future job losses in the transportation sector will be staggering. This 9% reduction at one company will pale by comparison. Ultimately, we will have to have some sort of universal basic income.

Robert Weekley

On another note: “Britain’s Rolls-Royce is slashing 4,600 jobs” – http://money.cnn.com/2018/06/14/investing/rolls-royce-job-cuts/index.html

Seems to be a thing, in Aerospace, too!

2 months severance isn’t good pkge

He’s only giving laid off workers 2 months severance 💰 pay? Not generous, across the board. It’s because all the crashes have made Tesla unreliable. Too much of a rush due to huge ego Space X, kill people is A-Okay. Good he halted his ego for a change.