Tesla announces a huge workforce reduction in its automotive division just days after a difficult shareholder meeting.
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Tesla has just announced a massive workforce reduction of about 3,600 employees amounting to about 9% of its total workforce. This comes just days after Elon Musk spoke to investors. It is also concurrent with speculation by many publications that Tesla was about to run out of cash, something its CEO, Musk, had denied.
The Associated Press reports that Musk said, "Tesla has grown and evolved rapidly over the past several years, which has resulted in some duplication of roles and some job functions that, while they made sense in the past, are difficult to justify today," He went on to add that Tesla is providing "significant salary and stock vesting" to those being let go, based on their length of service.
Although Tesla had a good May, its Model 3 compact luxury sedan launch has been significantly delayed by production problems. Elon Musk went so far as to say he was sleeping on the factory floor while trying to work on the problems himself. Shortly after that announcement, Musk tweeted images of himself at locations thousands of miles from the Tesla production plant.
Tesla's Model 3 has a huge backlog of reservations, but recent reports are that as many as 25% have been canceled. Coupled with slow cash generation due to the Model 3 delays, many in the investing media were predicting that Musk might be removed at the latest shareholder meeting. That did not happen and he remains in control.
This is not the first large-scale workforce reduction for Tesla. About eight months ago, Tesla fired 700 workers. In addition to its rank and file, Tesla has seen a huge turnover of executives leaving the company for other opportunities in the past six months. Why would senior managers be leaving a successful company?
Tesla stock closed today at $342.77 per share. The stock is up over the past month, but is below its price of $380.66 one year ago.
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Next headline. Big 3 picks up
Next headline. Big 3 picks up Tesla for pennies on the dollar. Just like another “Green” company, Solyndra, that took $535M in your tax dollars! Both California mind child’s. Maybe if green technology could actually make its own profit like the real world it would be feasible!
LOL DJ You are delusional,
LOL DJ You are delusional, comparing tesla to Solindra is idiotic at best. And the big three couldnt afford tesla nor would tesla ruin its mojo with being associated to the big 3
To big to fast over reaching
To big to fast over reaching for the future and destroying the economy every step of the way. This is another example of greed at it’s best and for what. To produce a vehicle that shouldn’t be on the road that as already killed innocent people. Like I said way to fast and greedy for the money.
I think on Tesla's part this
I think on Tesla's part this is a push to turn Q3 & Q4 profitable. The company is fine.
It is not a complete
It is not a complete reduction or a complete layoff. Salaried personnel are being let go, and production people are being hired. It's not an issue.
Trim the Tesla's fat. That’s
Trim the Tesla's fat. That’s what is needed to make a good company great. Having 5000 salaried positions that aren’t needed for the success of the company is a bad business decision.
The urgent push to make
The urgent push to make deadlines leads to desperation and inefficiency in hiring at Tesla. I would expect a trimming of fat periodically, completely normal.
It's a great sign for the
It's a great sign for the company. Tesla has 40,000 employees and will need to start being profitable soon.
Tesla layoffs remind me of
Tesla layoffs remind me of how they got rid of many of the machines that they originally implemented and later got rid of to speed up Model 3 production. Companies, especially new ones, make a plan, follow it, and then make adjustments to become more efficient. I see nothing wrong with this.
You who are in favor of this
You who are in favor of this are obviously Tesla cheerleaders. This is a horrible thing to do to folks who helped build that company. I’ll never buy another Tesla product. Business or not, I don’t care
No matter what, I love my S
No matter what, I love my S and will enjoy it’s fine driving! Nothing except the total destruction of Tesla will stop that.