Is the automaker's recent mass firing an aggressive attempt to repair Tesla Model 3 production issues?

Is the automaker's recent mass firing an aggressive attempt to repair Tesla Model 3 production issues?

News arrived at the end of the work week that Tesla has let hundreds of workers go immediately, with plans to fill nearly all vacancies. Could this prove an aggressive attempt to fix Tesla Model 3 production?

There is no way of knowing for sure how many employees Tesla let go or what its intentions are. Interviews with former and current workers by The Mercury News suggests that the automaker executed the task with almost no warning and may have axed some 400 to 700 workers or more.

Those sent packing include managers, engineers, and factory workers. Reports also say that some employees received promotions and/or bonuses at the same time, which were all a part of the company's annual performance reviews.

Inside Tesla's factory in Fremont, California

Inside Tesla's factory in Fremont, California

Tesla did make a statement assuring us that this move is not to be seen as layoffs, and has nothing to do with any union situations. The company has immediate plans to fill nearly every vacancy and is constantly recruiting new talent from around the globe.

Production of the Tesla Model 3 in Q3 was significantly below earlier guidance (260 of a projected 1,680+) due to "production bottlenecks".

At this point, with a goal of some 5,000 Model 3s per week in December, and some ~450,000 reservations to fill, the Silicon Valley automaker apparently has no choice but to stir the point. A company spokesperson told Mercury News:

“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 employees about 10,000 workers at its sole production facility in Fremont, California. Reports assume a majority of the employees that were fired worked at the factory.

Despite Tesla's above statement, those the Mercury News spoke with included a few who were pro-union and believe they were targeted. Others included factory supervisors, administrators, and workers; vehicle design and production engineers; and salespeople. Most workers interviewed with the promise of anonymity, however, the publication did speak with production worker, Juan Maldonado, who openly shared information.

Tesla Model S at company's Fremont factory

Tesla Model S at company's Fremont factory

Maldonado had been with the automaker for four years. He admitted to being late for work twice in the last few months, which he thought he had rectified with his boss. Obviously not as Tesla searched for candidates to replace and Juan was let go along with 60 other employees that he was personally apprised of.

Some reports point to the many firings being specific to the Model S, Model X, and SolarCity. However, others believe that it is more directly related to the Tesla Model 3 production.

Hopefully, as more updates come in, we will have a better idea of exactly what the case is. Tesla hasn't yet provided information about these dismissals to the state Employment Development Department. The automaker asserts that since these aren't layoffs -- because it was performance-related and employees will be replaced for the most part -- there's no need to report. However, this may still ultimately come to pass as a disclosure, since California requires a report if 50 more employees are laid off inside of 30 days.

Though some interviewees insisted that the firings have made a negative impact on worker morale, a Tesla spokesperson shared the opposite. Tesla says that the move has actually boosted spirits due to rewards for deserved employees. This may also appease some skeptics and analysts, along with working to push stock prices up if the aggressive move is, in fact, to fix the "Model 3 production bottleneck." This should prove especially true if it makes a notable impact on the automaker's upcoming Model 3 deliveries. Managing editor at Kelley Blue Book and Autotrader, Michael Harley, told Mercury News:

“It’s no secret that Tesla’s Model 3 development and ramp-up for production has been derailed. A major change in staff – whether dismissal or layoff – is an indication that there is an upper-level movement to put the train back on the tracks.”

Source: The Mercury News