Tesla to Cut 10% of Jobs
cnbc.com
cnbc.com
"Tesla expanded massively during Covid, as of now half of the dev team(including me) don’t have parking space or desk. It’s physically impossible for everyone to return to office.
"Should I ignore the email, or should I drive to the office and sit under the stairs?"
Commenters' general feeling was that it was a soft layoff, and some speculated that it might amount to constructive dismissal.
There has been a sudden uptick in return to office talk (despite plenty of reporting that covid is actually much worse than people realize now). Other people on HN have mentioned it and all of a sudden the leadership at my office, who were always extremely pro-remote work have suddenly started making mention of how valuable in-face communication is.
So the feeling of a "soft layoff" might be the intended effect.
The "good worker" narrative is there to justify management's decisions and reduce survivor's guilt, but you'll see when layoffs come amazing talent and mediocre talent are equally removed. Management has zero problem laying off incredible people en masse.
In the case of the return to office dynamic, you're specifically filtering out high-quality workers who also prefer to be remote, and the results are retention of all low/medium quality workers regardless of remote/office preference, and high quality workers who don't mind or have some reason that keeps them in the office. You don't filter out low-quality workers whatsoever because they'll at least go to the office to keep their job assuming they don't have options (or else they'd be higher quality workers or maybe they just leave the work force).
All this to say here in response that I'm increasingly irritated at the, what's the right word? Polarization? Radicalization? Politicization? Of work options and how those options are creating new tribes and battlegrounds.
https://covid19.sccgov.org/dashboard-wastewater
A week or so ago, it didn't look too bad. It is indeed much worse than I realized right now.
>These findings translate to one in five COVID-19 survivors aged 18–64 years, and one in four survivors aged ≥65 years experiencing an incident condition that might be attributable to previous COVID-19.
> Finally, the study only assessed conditions thought to be attributable to COVID-19 or post-COVID illness, which might have biased RRs away from the null. For example, clinicians might have been more likely to document possible post-COVID conditions among case-patients. In addition, because several conditions examined are also risk factors for moderate to severe COVID-19, it is possible that case-patients were more likely to have had an existing condition that was not documented in their EHR during the year preceding their COVID-19 diagnosis, resulting in overestimated risk for this group.
It also seems very possible that people with COVID diagnoses would be more likely to be on edge about their health / long COVID type symptoms. It also would have been nice if they differentiated things that can actually be tested for vs. things that can’t.
I’m not saying there isn’t an effect. I had bad cases of COVID twice. The first time I didn’t have any apparent effects afterwards other than my sense of taste taking a while to come back. After the second time - Delta - I definitely had some after effects.
We just need to be careful about claiming how many people get them. People are placeboing themselves into actually having symptoms (or thinking they do), and it’s hard to design studies to get around that.
Here hospitalization and deaths are not following the infection curve at all. They are still following the end of the earlier omicron curve.
You need to draw a line between Covid and colds, or else count colds like Covid.
Here's the protocol: https://www.cdc.gov/healthywater/surveillance/wastewater-sur...
Also, there is no common variant of COVID that is anywhere near as mild any virus we call "common cold". In the best case (Omicron for a young, boosted individual) it's comparable with influenza in terms of severity.
I imagine, too, if there are "100x engineers" (or whatever their role is) there may be compromise otherwise that's not generally applied; I would however think that someone who's that production - unless it's somehow a mostly solo role - would necessarily need to be on-site to utilize whatever resources necessary.
Isn't your Tesla supposed to be robotaxi, driving around autonomously while you work ? Why do you need parking spaces ?
https://finance.yahoo.com/news/elon-musk-reportedly-sleeping...
Another instance of Tesla violating labor laws, this time to get out of paying unemployment....
TIL and now that I know the term, I think I've had several employers use similar tactics.
Should be enough time to evaluate whom to keep and not offending anyone directly by stating economic issues
It has since been learned that he had been reached by Business Insider to comment about the sexual abuse case beforehand. He already knew that an article against him was coming so he framed the narrative before it even reached the public.
I would not be surprised this was the same here. Tell everyone "Leave if you don't like it or we will fire you" when you very well know that 10% of the workforce will need to be dismissed.
This is pure speculations but would not be surprising at all. I cannot imagine that the company's management is unable to do the math on number of employees vs. number of workstations.
Oh but who could have seen this coming except oh wait everyone.
The schadenfreude has been hilarious. Twitter has been blessedly devoid of the kind of chest-thumping he typically elicits and it has been glorious.
Anyways, they can and will buy office space to put the desks when needed.
So people who claimed less than 24h ago it was at lest partially a way of creating cheap layoffs, were proven right pretty swiftly.
The man has bought Twitter for the purposes of distracting and manipulating the public.
To be fair, twitter ownership is not required to use twitter for this purpose.
Business insider gave him a heads up because they asked him for comment before publishing the story.
How would you tell?
Seemed to work out well for them.
I don't think it was a good decision, but Yahoo had/has way more issues with its business than whether or not it allows employees to WFH.
Even for IT workers, I guess that sometimes you need to test on the actual hardware, and the factory is where most things happen.
I am not saying that working from home is impossible, or that banning it is a good thing, but you can't really compare Yahoo and Tesla.
Maybe a software company should have 1/5 days in office (for meetings/dicussions/onboarding/...) while a manufacturing company might need 4/5 days for desk workers to be on site. But to say 40h of 40h should be at a desk doesn't seem like a sensible treshold.
Right now my time is 6PM and I'm at my office desk. Because I'm home. Granted, I'm writing on HN waiting for some tests, but if I had been at my office, I would have taken a 2h lunch and left at 2 or 3 this afternoon ...
Whatever Yahoo's issues were they were going on for a LONG time. Even when they HAD WFH...
Two days ago the "Who is hiring" thread here had something like 20+ software engineering positions for Tesla.
https://news.ycombinator.com/item?id=31585021
More erratic decision making from Mr Musk. Like, I dunno, the time he told Twitter he was taking Tesla private while tripping on LSD. He needs to step aside from Tesla at this point.
The absolute worst thing you can do is go into a "soft freeze" mode where new hires slowly stop getting approved, backfills aren't happening, middle management gets told that hiring will be revisited next quarter, etc. Non-management employees will notice this and you'll start getting rumors circulating and people leaving.
This reminds me what I once read about the challenges of zookeeping big cats. They tend to appear very often perfectly healthy until one day they just die. And when you do an autopsy on them you realise that they were sick since weeks or even month, but it often does not “show” in a way you would expect.
The speculation is that since they are not incentivised evolutionary to show that they are hurt. In the wild they are often solitary creatures so no one would or could help them, on the other hand if they appear hurt that would invite other predators to challenge them. Sounds like the incentive structure is very similar for companies.
I thought it was short-sighted. There were a small number of qualified people for the positions and we constantly complained that it was hard to find them. If one of those qualified candidates applies to a position and gets ghosted, they may never apply again, either because they lose their confidence or out of spite.
There is an art to wording the communication in such a way that it does not lie outright, nor does it spell out a hiring freeze.
Look at this situation, even. Elon says he's going to cut 10% of Tesla's jobs. You're a Tesla employee. Is your job on the chopping block? Should you start looking? Nearly every person at Tesla is now living with fear that they might not have a steady paycheck in a month. To me this is a way shittier situation because you're stuck in limbo for a month or more. Isn't it a lot better to have a single all-hands meeting where you announce layoffs, the people who are affected will be contacted by their manager with severance information, and the plan going forward? Rather than just having this stuff linger for months?
I call bullshit on the inclusion of "upper management". To think upper management cares about anything other than short term profits (and their own bonuses) is just naive. When COVID hit, the company I worked for laid off 40 people (we were just a couple of hundred employees in total). You know how they laid them off? One morning they simply asked the sysadmin to turn off their logins.
It is not a "hard decision" - to them, it is just like throwing away a chair or a table. Remember that dude who laid off 900 something people on a zoom call and shit talking them later? You mentioned morale, what do you think happens the morale of the people who found half of their (small) team laid off with zero warning, like it happened to my team?
There may be exceptions of course, but it is safe to say most companies don't give a shit about their employees, even their star employees.
I am not complaining about layoffs here (though the way they do it is cruel). Just pointing out that companies are not as heartbroken about it as you seem to think. It is just business
The long slow method gives more time for people to bail the hell out. As a worker, I think I prefer the time.
> Isn't it a lot better to have a single all-hands meeting where you announce layoffs, the people who are affected will be contacted by their manager with severance information, and the plan going forward?
Well, maybe. But if my employer announced layoffs, I would be looking for a new job the next day regardless of whether I was included. For one thing, 10% layoffs is unlikely to correspond to 10% reduction in total work, so my workload just grew by 10%, and somehow I doubt I'm getting a 10% raise to compensate. For another, the company has now lost its ability to attract top-tier talent, for several years if not forever.
Companies have all sorts of fake job openings, even when things are good now. They view it as a form of marketing, showing that they're growing. That it wastes applicants' time applying is an externality. It's not hurting them.
Big cuts like that, in my experience, happen when there is an either mismanagement or an external shock that requires action faster than what can be achieved with natural turnover.
Otherwise, headcount targets can be reached by managing the hiring rate. There is always natural turn-over. If you need to grow, hiring rate>turnover rate, if you need to shrink hiring rate<turnover rate.
Move fast and break things might have been fine in the early days. Seems to me like the company needs to 'grow up' and demonstrate responsibility to shareholders and customers, and to do that it likely involves significantly sidelining Musk, who clearly behaves very erratically.
This specific pattern, switching suddenly from "thousands of open positions" to “freeze and maybe layoffs” is typical for large large, mature, professionally managed companies.
But Tesla is supposed to manufacture more cars than it manufactures now. It is supposed to grow its capacity to explain its valuation, at least partially. I think they make 1 million cars per year and want to make as much as Toyota + Volkswagen combined who make probably around 20 million cars per year.
So how some short term cuts by 10% connect to the idea that Tesla will grow by 1000%?
Of course in every company you can trim some fat, but isnt Tesla supposed to expand to at least partially explain the valuation?
Also if they wash out people who can get a better job, they are left with those who are stuck there (there is a difference between firing non performers and making best people leave - I define best as someone who can find another job). Will their quality stay the same? Their competitive edge was markering and (supposedly) better technolofy / engineering / programming. Losing top staff in exchange for engineers who accept working as in a sweatshop doesnt sound mature for me.
Shareholders paid him tens of billions to stay after he wanted to step down as CEO after Model 3 push.
https://www.theguardian.com/business/2022/apr/21/elon-musk-s...
Elon Musk is golden goose for Tesla shareholders.
20 open positions, especially for an in demand profession like software, is the norm at companies at such size who are doing well.
It all depends on context though - for a company as massive as Tesla, 20+ open postings for SWE is nothing. It certainly doesn't warrant alarm bells, I think.
I'd be the last person to defend Elon Musk, I don't know the guy, but just want to point out that when you're at his level of wealth and power you also have very wealthy, powerful enemies.
I see ongoing, what appears to be coordinated, attempts in the mainstream/social media to paint him as crazy. I have no special access to the truth but I'd be unsurprised if those stories are 100% politically motivated and have no basis in reality.
The parent never used the word crazy, you did. His behavior is erratic. I don't know how that's not obvious to anyone watching him. Does it make him crazy? I don't know, but he is most certainly erratic.
As a reminder, this kind of thinking lead to the worst atrocities of 20th century history.
There is a lot to criticize about Elon Musk but he's too influential for any of that criticism to reach the majority.
When you're that wealthy you can also circumvent the law. During the pandemic, Tesla "threatened" to move from California to another state if they wouldn't be allowed to reopen their factories. This caused the state of California to basically make an exception for them... so they circumvented the law which other smaller companies could not do.
Personally i can't understand the obsession with someone like Elon Musk or even someone like Bill Gates... It's easy to control your image when you're a billionaire, so you don't actually have to behave and live ethically.
So it's pretty clear why these interests would want to badmouth Musk, but this doesn't really change the viability of the fundamental business models of Tesla and SpaceX. Basically, this is an industrialist model, not a financialist model, and that's the opposite of what the likes of Warren Buffett have been into. Industrialist models are really what the USA needs, the whole neoliberal financialization game has been a disaster for most of the country.
You realize that much of our opinions aren't from critical think but are simply assigned to us by elites.
Do Musk's own tweets fall into this category?
Musk is certainly an elite.
The elite that I had in mind, however, were the establishment elite.
He went a bit too far with the Twitter buyout stunt.
Honestly, he should just get off social media and take a vacation or something. But of course he’s too egotistical to do that and will try to muddle his way through it. Its amusing to watch as an outsider but I can’t imagine its a lot of fun for people at Musk companies (+ Twitter).
There could be all kinds of other factors, but I have been a Musk watcher for a decade and I have a theory on the timing.
There was a major shift in Musk’s public behavior, and his state residency, around the time he was about to have to pay a lot of CA state income tax.
Having to write a ten digit check to the government appears to make most people lose some of their rational thinking abilities.
They seem to go into a siege mentality for one thing.
It appears to me that humans are just not evolved to handle his level of wealth/resource disparity.
And from all that... to this?
From a much admired and respected 'inventor' to a cringeworthy Twitter 'edgelord.' Just been a crazy ride.
[0] https://waitbutwhy.com/2017/03/elon-musk-post-series.html
In the US (and many countries) we don’t actually have work contracts as full-time employees. Offer letters aren’t contracts, as an lawyer will remind us.
Companies can, and will, change employment terms and compensation as they want.
Tesla does have an exception process for remote work, though.
Any kind of competent HR department will be able to manage a paper trail sufficient to dismiss at-will employees in a bullet-proof way, especially in a general business turndown.
Edit: If you’re looking for SWEs, I’ve spoken to three at Tesla who are looking for new opportunities. They’re an org to target for talent acquisition.
2) given that this sort of thing is very common during a downturn, I think Tesla's lawyers probably have a well worked out method on how to do it; I'm not saying it's kosher, but it's common. The only reason this gets so much press is that it's Elon Musk.
I can come in at 7AM, crush it, and leave at 2PM. Here is the thing, however - the guy who came in at 10:30AM and is sitting at his computer for some reason at 7PM is going to be viewed as the "hard worker". It's all bullshit.
If this is what Musk is doing, he is going to shed some of his most productive workers and leave those in place who are just good at fronting.
We'll now see who will survive this correction, no matter how long it takes.
It will be far worse since we're still in the unresolved credit bubble that created that crash. We never actually solved the core problems that created that crisis.
What we're seeing now is the beginning of what we have avoided for over a decade, and narrowly dodged during the pandemic, start to finally unravel.
Is it just bias from such a long, fun ride that tech has had that make people unable to see this? Back in 2019 there were plenty of people deeply worried about our credit system and the fragility of our global economy. Our actions to avoid catastrophe in 2020 only allowed the issue to become worse.
We've been living in a fantasy economy so long people have started to believe that nothing is real (just a few days ago there was a post claiming that "natural resources" don't exist and everything is fantasy). But a variety of factors are coming together that so that we'll see the revenge of reality. I don't think it's going to be pretty.
A lot of people have the capacity to set aside morals/ethics for a bit of chump change.
The work is interesting. I'm sure the people making nuclear bombs probably said the same thing. Or the death star. "It is such interesting work" Yeah ok.
Robotic factories, Fool Self Driving, Machine Learning on huge real-world dataset, etc, etc.
One of those moments where the typo feels a lot more accurate than the correct word.
It's hard not to be long Tesla and take this financial turbulence as that, turbulence.
And everyone is acting like the best employees are going to be the ones quitting. Nah, the best employees are highly engaged employees not ones that are technically talented but will flee just because they have to go to an office. Your most technically talented employees are often not your best employees nor your most valuable. They're important and expensive, but the person in ops that gets paid a low salary but knows the ins and outs of everything and knows how to troubleshoot everything to the point that stuff is fixed is vital. A software developer who is really smart can and will be replaced.
There will be HR people working on retention of top employees as we speak. https://www.mckinsey.com/business-functions/m-and-a/our-insi... gives an insight into this when it comes to M&As
You better bet there is some amount of dead weight/low rated employees who have been interviewing around for there own reasons and haven't been getting any decent offers, so they just rest and vest. They'll happily return to office while the high performers get some $700k offer elsewhere
This is exactly why Netflix decides to pay very nicely for you to quit, if you reach out to your manager about that. They don't want you to stay an extra year trying to pass hard interview loops elsewhere
Also, have you ever worked in a company affected by consultants like you suggest? They don't have capability to recognize or motivate good people .
It talks about employees that were very productive and happy hitting a stumbling block and suddenly realizing that "hey, this isn't the same place it used to be", and then leaving.
Saying "no work from home" and "10% layoffs" are much bigger triggers for this than getting rid of free sodas.
Sounds like that ops guy should be paid more...
For who?
So yesterday when it was Coinbase [0] announcing cuts the reaction was, 'ha ha crypto bad', 'worst of luck to them' and now when it also affects companies like Tesla, now the reaction is 'Shocking', 'everyone is doing it now', 'I wouldn't read much into it. A 10% cut is completely normal and healthy for a company the size of Tesla.'
This to me sounds like some form of cope that many thought the market was always going up forever.
The recent market rally of 2020 had to come to an end.
Mostly because of utterly insane injections of cash into the economy, whether by unsafe lending practices creating money out of thin air (which ended up causing 2008ff) or by the central banks creating money out of thin air and buying up assets.
Now, especially after two years of pandemic-related bailouts, there's no government whose balance sheet hasn't been hit hard... governments can't take up more debt to inject into the economy, and the central banks cannot because inflation is already skyrocketing across the world.
Additionally, the people are fed up with social inequality worldwide - they saw that a lot of wealth was redistributed from the bottom to the top stock owners over the last two years. It may very well be that governments shift focus from propping up the stock markets to preventing social unrest, not to mention climate change which is bound to send a lot of companies' worth towards the bottom as their business model becomes outdated (e.g. car manufacturers, oil/gas companies).
The startups who are paranoid of the markets and prepare in advance for profitability will continue to survive and the startups constantly raising money each week and making little to no revenue will be caught swimming naked when the market retraces. Fast is a prime example of this.
We could have another dotcom style crash and it may take another 3 - 4 years to get back to the same all time highs again where that is still possible.
I wouldn’t be surprised if we just go sideways for a year or two in the market as fed tries to balance inflation and growth to get out of the Covid bubble without a disaster
I took a macro economics course at university that year, taught by a professor who was just about to retire after 40 years of teaching the subject. He was blunt with us: "I don't know what's going to happen, but I bet it's going to be interesting!".
I don't even know if he's still alive (he was in his 70s then and still teaching!) but I bet if he is, he's saying the same things now.
Other comments suggest a collar or TIPS which are both fine suggestions. I wouldn’t mess with options unless you know what you’re doing. I threw a bunch of extra cash into a TIPS etf with ticker “TIP”. I’m also selling puts on commodities futures, bought US energy stocks, and bought a house last year (as rent is skyrocketing and inflation will eat away at my debt). I STILL have a shitload of cash idk what to do with…
Some people like gold but I don’t get it personally. Don’t copy me I’m tolerating quite a bit of risk.
The article says "super bad feeling about the economy", and that their Shanghai factory hasn't been able to reopen. The former sounds like BS.
Then it talks about inflation concerns, but that's not a good reason to get rid of employees that will be locked into pre-inflation salaries for the next N years.
Other than "we're not fixing the factory any time soon", the only thing I can think of is that they're looking at early market share info, and expect to be steam rolled by the existing auto manufacturers in the next few years (to the point where they can make more cars than they can sell, which is currently unthinkable!)
[Edit: A sibling comment says this won't touch the manufacturing parts of the company. So, they're laying off sales, management and engineering, I guess? That's a better fit with Elon's ego. I guess the plan is to just coast for a few years during the downturn? If so, that's a textbook mistake big companies make during recessions -- when the economy recovers, they're surprised that they're not competitive anymore!]
I bet he is doing this out of spite. The man has been acting really strange in the past few months.
> Tesla will be reducing salaried headcount by 10%, as we have become overstaffed in many areas. Note, this does not apply to anyone actually building cars, battery packs or installing solar. Hourly headcount will increase.
This addresses any confusion about how two new factories could ramp if overall headcount was going to take a 10% hit. But to be fair to CNBC, they probably didn't have this context when they wrote the article and headline.
Source: https://twitter.com/WholeMarsBlog/status/1532728341865943040
https://fortune.com/2022/05/25/elon-musk-equity-component-tw...
https://www.law360.com/articles/1324006/tiffany-lvmh-lower-m...
You're going to survive 10 months.
Suppose you fire 10%, so now you spend $99/month and let's say revenue is linear, so now you make $90/month. You're now going to last 100/9 = 11.11 months and that's more than 10% longer already.
Now if you fire from positions that you got in anticipation of them contributing but they don't then you could even go negative to positive.
So it's not 10% more days even in the worst case where you are running something like a consulting business where revenue is proportional to number of heads and for complex operations it can make you profitable.
He might be thinking he can get 5% of the people to quit just based on differences in values, making his remaining employees more homogenous and giving them a common culture.
He came as Republican not as a Republic. Give it a few more years.
WFH.. criticism about Twitter.. all things better discussed when economy recovers.. how convenient..
Also, this is supply chain related.
Do you find it odd that all the stories coming out refer to this single Reuters statement?
People are much more compliant when afraid of losing their livelihoods
HN comments have been going downhill for years.
It's a shame because the thoughtful, moderate commenters just leave and are less likely to come back.
And btw SpaceX laid off around the same pct of workers a while back and they're doing fine now. Same with a lot of companies, some of which I was working for at the time, and I don't think their leadership was evil.
Considering how bad Elon is at making predictions, this is actually great news.
Musk is the world’s wealthiest individual. I’m having trouble seeing see how being bad at making predictions results in that outcome.
"Covid will be gone by April 2020":
https://twitter.com/elonmusk/status/1240754657263144960
"FSD will be achieved by 2018":
https://twitter.com/elonmusk/status/686279251293777920
"Neuralink in human brains by 2020":
https://news.yahoo.com/everything-know-neuralink-elon-musks-...
Being wealthy has also a lot to do with being at the right place, at the right time, inherited wealth, and outsourcing efficiently.
On paper.
He bet big on EVs, which the market rewarded. Same happened with Microsoft and computers maybe thirty years ago, main difference being that Tesla is not holding a semi monopoly, and competitors are catching up quickly.
"Work 80 hr weeks! Be just like me!"
Musk: becomes worlds richest person
Employees: laid off
What planet do you live on where you see this as a sustainable, world-improving system for the world and for compensation? Anyone that works 50 hr weeks for this dude is out of their mind.
Most job are bullshit job these day.
A lot of companies are actively making society worse for their profits.
Almost all product fabrication have left the US for China.
Nonetheless, both China and Russia have switched from communism to capitalism while remaining violently bad, so it seems dubious that this is determined by the economic system rather than the political system.
"Tesla CEO Elon Musk has a “super bad feeling” about the economy and needs to cut about 10% of jobs at the electric carmaker"
"Musk has warned in recent weeks about the risk of a recession, but his email ordering a hiring freeze and staff cuts was the most direct and high-profile message of its kind from the head of an automaker."
"Musk’s gloomy outlook echoes recent comments from executives including JPMorgan Chase CEO Jamie Dimon and Goldman Sachs President John Waldron.
A “hurricane is right out there down the road coming our way,” Dimon said this week."
In other words, he's doing his job and preparing the company to weather a very likely recession. Judging from the tone of your comment though, I imagine you would prefer if he neglected his responsibility to the company and its shareholders in order to spare some of his workers the inconvenience of looking for another job. That way the entire company can suffer together and lose even more positions.
"Please don't comment on whether someone read an article." https://news.ycombinator.com/newsguidelines.html
Probably in this case the shareholder representatives on the board are privately pressuring Musk to do layoffs. People seem either ignorant of this fact or unwilling to comment on this fact, but the major shareholders (mutual and institutional funds) can be seen here:
https://money.cnn.com/quote/shareholders/shareholders.html?s...
Maybe the bigger point is that while blue-collar workers in the USA have been treated like disposable units for years under the neoliberal program, now the white-collar workers who thought they were above all that are going to get the same treatment, much to their shock and dismay. Should have seen it coming.
Where did the OP say or imply that?