Rapid Expansion Followed by Layoffs Amid Worsening Business Environment
Musk CEO Sends Email to Executives Mentioning "Need to Cut 10% of Staff"
[Asia Economy Reporter Kim Hyunjung] American electric vehicle manufacturer Tesla has closed some facilities in California and laid off hundreds of employees from its Autopilot team. Recently, Tesla CEO Elon Musk stated that about 10% of the workforce must be reduced due to the deteriorating global business environment, which is seen as part of this restructuring.
On the 28th (local time), Bloomberg News, citing sources familiar with the company’s situation, reported that out of 350 employees at Tesla’s office in San Mateo, western California, about 200 were laid off. These employees were responsible for so-called "data labeling" tasks, evaluating customer vehicle data related to Autopilot driver assistance features. The office was closed, and some remaining staff were relocated to other offices.
Tesla has grown into a giant company employing about 100,000 people worldwide by moving its headquarters to Austin, Texas, and building a new car production plant in Berlin, Germany. However, as the business environment worsened recently, CEO Musk said in an interview with Bloomberg on the 21st of last month, “A recession is unavoidable,” and announced plans to cut 3.0?3.5% of the total workforce over three months. On the 2nd, he sent an email to executives diagnosing the U.S. economy as “feeling very bad” and mentioned the need to reduce staff by about 10%.
Tesla’s downsizing efforts have focused on areas where hiring was most active recently. Some HR personnel and software engineers were targeted for layoffs, and there were cases where employees were dismissed just weeks after starting work, according to the report.
The layoff process has sparked various controversies. There have been claims that Tesla unfairly calculated severance pay linked to health insurance issues and forced employees to accept it. Some former employees have filed lawsuits in Texas courts, alleging that the company conducted mass layoffs without prior notice. They claim Tesla abruptly laid off about 500 employees at its Nevada battery plant since last month, violating legal regulations requiring 60 days’ advance notice of termination.
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