Tesla fires hundreds from headquarters, factory
October 13, 2017  Louis Hansen

Company says it will replace most workers

PALO ALTO – Tesla fired hundreds of workers this week, including engineers,
managers and factory workers, even as the company struggles to expand its
manufacturing and product line.

The dismissals come at a crucial point for the company, which is pushing to
increase vehicle production five-fold and reach a broader market with its
new Model 3 sedan. The electric vehicle maker missed targets for producing
the lower-cost sedan, manufacturing only 260 last quarter despite a wait
list of more than 450,000 customers.

The company said this week’s dismissals were the result of a company-wide
annual review, and insisted they were not layoffs. Some workers received
promotions and bonuses, and the company expects to hire for the “vast
majority” of new vacancies, a spokesman said.

“As with any company, especially one of over 33,000 employees, performance
reviews also occasionally result in employee departures,” a spokesman said.
“Tesla is continuing to grow and hire new employees around the world.”

In multiple interviews, former and current employees told this news
organization little or no warning preceded the dismissals. The workers
interviewed include trained engineers working on vehicle design and
production, a supervisor and factory employees.

Workers estimated between 400 and 700 employees have been fired. Tesla
refused to say how many employees were let go, although the company expects
employee turnover to be similar to last year’s attrition.

The spokesman said most of the dismissals were administrative and sales
positions, and outside of manufacturing. Tesla employs about 10,000 workers
at its Fremont factory.

Workers spoke on the condition of anonymity because they feared reprisals
from the company. Employees said the firings have lowered morale through
many departments. Several said Model X, Model S and former SolarCity
operations seemed to be targeted.

Juan Maldonado, a production worker, felt the tap on his shoulder on
Thursday. He worked at Tesla for nearly four years, and said he heard about
60 other workers in his section of the factory were dismissed.

Maldonado, 48, said he ran late for work twice in recent months, but thought
he had straightened things out with his supervisor. Now, he said, “I’m going
to try to find a job.”

CEO Elon Musk said factory output will increase production to a half-million
electric vehicles in 2018. The company expects to deliver about 100,000
vehicles this year.

Musk has told investors the company is focused on Model 3 production and
expects to eventually build 10,000 cars a week. The manufacturing will
become highly automated, but Musk told investors during the early ramp up he
expected high overtime costs.

He also joked to employees they would be going through “production hell” to
meet demand for the new car. The company said recently a manufacturing
bottleneck caused it to fall far short of its goal to produce 1,500 Model 3s
in the quarter.

The company has also started to cut some former SolarCity operations, which
were acquired by Tesla last year. In August, Tesla told state regulators it
would layoff 63 workers in Roseville, including sales and administrative
staff. Tesla lost $336 million in the second quarter.

This week’s dismissals have not been reported to the state Employment
Development Department, a spokeswoman said. The state generally requires
companies to report layoffs of more than 50 employees in a 30-day period.

Tesla said the performance-based departures were not considered layoffs and
not subject to state notifications. It also said the moves have generally
boosted worker morale, as high-performing employees have been rewarded.

The clean energy company — maker of luxury electric vehicles, battery
storage and solar roofs — has failed to post an annual profit even as its
stock has soared on promises of revolutionary products. About 450,000
customers have placed $1,000 deposits for the Model 3.

Tesla has faced ongoing discontent from some factory workers, who have
complained about work conditions and wages below the auto industry average.

Tesla has a hearing before the National Labor Relations Board in November
for charges that company supervisors and security guards harassed workers
distributing union literature. Tesla denied the accusations.

Openly pro-union workers were among those fired this week. Some believe they
were targeted.

The company denied union activities played a role in the dismissals.

Michael Harley, managing editor at Kelley Blue Book and Autotrader, thought
the dismissals could be an effort to improve vehicle production.

“It’s no secret that Tesla’s Model 3 development and ramp-up for production
has been derailed,” Harley said. “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.”
[© 2017 Digital First Media]
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Dismissal is the termination of employment by an employer against the will
of the employee. ... Other terms for dismissal are being "sacked", "canned",
"let go", "ran-off", "axed", "given walking papers", "given the pink slip"
or "boned" ...

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