Secrecy Fuels Speculation on Tesla Firings

Sources estimate that as many as 1,200 workers were fired, with new reports circulating as to why they were let go.

For a guy who loves to promote big plans and talk about society-shifting technological applications, Elon Musk has been pretty quiet about Tesla lately.

The company’s drama started earlier this month when it reported missing Model 3 production goals to the tune of 260 vehicles delivered vs. promised production levels of over 1,500, in ramping up to 20,000 vehicles/month by December.

Then, last week, after blaming production bottlenecks for the Model 3 shortfall, the Wall Street Journal reported that the low production numbers were actually the result of workers having to make a number of parts and assemblies by hand, and that the creation of highly-touted production lines with advanced automation were at least a month away from completion.

The bad news continued earlier this week with reports of hundreds of Tesla employees being fired for poor performance. The key here is that these workers were fired, not laid off, so Tesla is not required to report on the exact number who were let go. Different sources have estimated this number at between 400 and 1,200 workers.

New reports have circulated that there might be more to these recent firings.

One theory is that eliminating these workers, who ranged from plant floor assembly to production management, were part of a plan to cut costs. Conservatively speaking these reductions, which may or may not have included severance deals, could have cut $15 million from the company’s annual operating costs.

While this pales in significance to the $336 million the company reportedly lost in the second quarter, it might have become belt-tightening time for a company that is yet to turn a profit.

Some have also pointed to Tesla’s perceived aversion to unions. Tesla has a hearing scheduled with the National Labor Relations Board in November after supervisors reportedly harassed workers who were handing out union information at the 10,000-employee Fremont, California plant.

Tesla has denied that union activities played a part in the firings and states that since these employees left, moral at the plant has improved. Additionally, Tesla states that some employees received bonuses and raises after these reviews.

It’s also worth noting that the firing took place just days after Tesla recalled 11,000 vehicles for faulty rear seats.


Latest in Operations
More in Operations