Tesla Fires 100s Of Employees As Model 3 Ramps Up In "Production Hell"

According to reports, this past week Tesla fired about 400 employees. The timing of this is rather peculiar as it was recently noted that the electric vehicle manufacturer was in "production hell," with the Model 3 significantly ramping up its production.

The Model 3 has missed the forecasting mark in a rather big way. Less than 300 units were shipped in September, which dwarfs the initial forecast of 1,500 vehicles being delivered.

Tesla released a statement on the firings attributing it to the annual performance review process. While Tesla will not comment on the number of employees who have moved on, if it's around 400 then that's just over one percent of its total headcount.

Frankly, that's not too alarming from my perspective.

Tesla's statement on the firings, below:

"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. 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."

So, what do YOU make of this round of firings?

**Special thanks to BobM for the tip on this story!

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qwertyfla1 - 10/14/2017 4:32:40 PM

+4 Boost

Firings shall continue until moral improves!

Agent00R - 10/14/2017 6:49:37 PM

-2 Boost

Hey there, Bob.

I liked the story and wanted to add some color on it plus modify the headline. Unfortunately, I can't do that without reposting the story entirely.

Please keep the posts coming in. We love when people contribute.

SanJoseDriver - 10/14/2017 6:30:03 PM

-2 Boost

They cut the bottom 1%, it's a smart thing to do and many large companies do this every year with a much larger % of the workforce. Cutting the lowest performers tends to increase productivity without increasing headcount, but can impact morale if you cut too deep. I don't think it was a cost saving measure because they also handed out a bunch of raises and promotions at the same time.

Agent00R - 10/14/2017 6:50:59 PM

+1 Boost

I actually agree with you on this one.

The timing — October — is peculiar. I would have expected this in July for half-year reviews or, say, January/February after year-end reviews are conducted.

vdiv - 10/15/2017 10:53:35 AM

+4 Boost

The timing and the numbers are indeed very peculiar.

TheSteve - 10/14/2017 6:40:41 PM

+4 Boost

You'd expect employees to be fired as part of cost-cutting measures for a company that consistently bleeds red ink.

mre30 - 10/15/2017 8:50:00 AM

+2 Boost

He cut headcount pure and simple to cut costs. For a company (no matter how large) to pare poorly-performing staff, they just cut them loose and then rehire new, better people.

For a PUBLIC company, like Tesla, financial reporting custom dictates that if they do a permanent headcount reduction (i.e. people are cut because of a cost-cutting project) the company will put out a press release so that investors know why headcount went down (reported at least annually in the company's 10K and sometimes in an 8K or 10Q).

This is cost cutting, not "getting rid of the dead wood".

vdiv - 10/15/2017 11:00:13 AM

0 Boost

Could be both, right? The thing about Tesla though is it is growing rather rapidly so this is not just about cost reduction, this is about productivity increase, something that the board and the investors definitely want.