What’s Behind The Mass Firings At Tesla?

 

Tesla fired hundreds of workers last week, in a move that is unusual for a large corporation. How many workers were let go is not clear, with some estimates going as high as 1,200 people. Tesla is required to notify the State of California of layoffs, but it says pointedly that these people were terminated, not laid off.

Tesla factory in Fremont

The company is being tight lipped about the reason for so many dismissals at one time, saying only that they resulted from annual performance reviews. The company has issued a statement claiming that those same performance reviews also resulted in an unspecified number of promotions. “As with any company, especially one of over 33,000 employees, performance reviews also occasionally result in employee departures,” the company says.





The United Auto Workers has been been trying to organize a union campaign at Tesla’s Fremont factory.  The union has filed a complaint with the National Labor Relations Board alleging that Tesla has acted improperly in its attempt to blunt the organizing effort. A hearing before the NLRB is scheduled for November. Is there a connection between the UAW campaign and the firings?

Some of those who were let go certainly think so. “I had great performance reviews. I don’t believe I was fired for performance,” Daniel Grant told The Los Angeles Times. He has worked at the Fremont factory since 2014 as a production assistant and suspects he was fired because he raised safety issues and supported a union drive.

“The company didn’t show me or others our most recent reviews when they fired us,” Grant said. “I would like the company to release our full reviews, including peer reviews, to us.” Other workers on the production line tell a similar story. “Our reviews were due in June. In June they told us they would be in August. In September they told us October.” In the end, the workers who were terminated say they never saw those performance reviews at all.

Another factory worker, Mike Williams, says he also believes he was fired because he spoke up about safety issues at employee meetings and because he wore a union shirt to work. “I had a union sticker on my water bottle, too,” he says.

Forbes correspondent Chuck Jones says mass layoffs are unusual for a company that is experiencing rapid growth. “No matter what type (meaning positions) are let go, this creates disruption in a company not just for workflows but also lost productivity due to talking about what happened and what may happen.” He thinks the firings may make it harder for Tesla to attract highly qualified workers to fill the newly vacant jobs.

Tesla does not act like a typical company in any way, shape or form. Elon Musk is known to be a difficult person to work for. He demands a lot from his people and he has previously made his displeasure known about the union organizing campaign. He has made it clear that he considers any union activity to be a personal insult to him as he sees himself as the benevolent overlord of the Tesla empire.

There is more than meets the eye here, but what exactly is unclear. Tesla is struggling mightily to get Model 3 production going smoothly. It seems an odd time to be rocking the boat and cutting staff. Elon has his reasons, no doubt, but what they are remains a mystery. If a link is established between the firings and the UAW organizing campaign, Tesla and Musk will have opened a can of very large worms.

Even if no such link is established, some observers — like Forbes contributor Dale Buss — worry that the chaos surrounding the Model 3 production process indicates that Elon maybe needs a performance review of his own.





About the Author

I have been a car nut since the days when Rob Walker and Henry N. Manney, III graced the pages of Road & Track. Today, I use my trusty Miata for TSD rallies and occasional track days at Lime Rock and Watkins Glen. If it moves on wheels, I'm interested in it. Please follow me on Google + and Twitter.
  • Ed

    The Forbes correspondent is acting whacko. He thinks firing weak performers makes it harder to hire highly-qualified workers to fill vacant jobs?!?! Ah….wouldn’t the opposite be true? Wouldn’t lesser-qualified workers stay clear of Tesla, while better qualified workers would seek positions at Tesla? Wouldn’t Tesla middle management work harder to make sure they only brought in highly-qualified workers and reject weaker ones? Forbes must have an upside down culture going at their own headquarters!

    The harsh reality is that if a company is not periodically doing performance reviews – and these will surely result in terminations – then its culture will siide downward to accommodate the weakest performers. That has been true forever….not just with Elon Musk’s companies. Great companies do not tolerate poor performers…and especially poor performers working against a company’s interests.

    • Kompani

      However, as stated in the piece, many of those fired did not receive their performance review for this year so how can they be fired on a lack of performance if it has not been reviewed? Your point is valid that companies need the very best performers and that will attract the best of talent but this appears to be something a little different. Firing people without a review, not good business practice by anyone, anywhere.

      • Ed

        Of course, none of us “out here” has the whole story. Will wait.

      • Ed

        When the semiconductor industry was in its formative years of the 1970s, it was common for a group or department head to be told to “Cut Ten”, meaning cut 10% of your staff. The simplistic assumption was that in the rush to build up the company, many less capable, less willing, less safe, less committed people had been brought into the organization.
        The downside of this approach when done too often was the managers tended to hang on to weaker players in order to have someone to cut when the “Cut Ten” order came.
        The tech world has always been a meritocracy, and that attitude is why it has moved so fast and disrupted so much. Imagine Intel trying to innovate and operate with the UAW controlling the workforce!

      • Steve Hanley

        That is precisely the point.

    • koshal patibandla

      When did you last hear google facebook or apple doing mass firing

    • I think you could argue that a lot of ways, Ed. Assuming you’re a highly qualified worker at Ford or Toyota, seeing this, why would you leave a “safe” job and the benefits that come with to go work for Ol’ Musky and risk getting fired under what appear to be mysterious circumstances/Musky’s random whim a few months down the road when his impossible promises turn out to actually be impossible?

      This is bad for Tesla. My $0.02.

    • fred smith the deplorable

      I’m no great fan of Tesla, but firing deadwood and trouble-makers is a good thing. The larger the organization, the easier it is to accumulate non- and counter-productive employees. See “government”.

  • disqus_LIL0PrKFKY

    The company fixing safety concerns by firing those that raised them?
    There is also the possibility with factory robots being improved (which takes time) many employees would become redundant?

  • Andreas Klein

    Not enough info to reach one conclusion so l can only say it is the Destiny :o) and I’m right 100%

  • IPV7

    It’s very odd and troubling to say the least. We had plenty of tesla upper management who were in charge of important initiatives for the company quit and now this.

    I wish musk would just have a singular focus on this company and this company alone because it sorely needs his undivided attention.

    He’s just spread way too thin in my opinion and the earth needs him and his company (tesla)to succeed.

    • Steve Hanley

      You may have a point.

    • Tesla isn’t the only company that can put a bunch of laptop batteries under a car’s bonnet.

      • IPV7

        Jo Borras,

        But who has a operating gigafactory besides tesla at the moment?

        • Who needs one, though? Even Tesla can’t find a way to max it out.

          • Joe Viocoe

            400,000 reservations just from launch,… I think they more than maxed out demand.

          • Agreed. What % of those buyers do you think are hoping to get an early car and flip it?

          • Joe Viocoe

            0.6022140857%