16 ms·

Tesla fires hundreds from headquarters, factory

184 points by fmihaila 9y ago

mc32 9y ago
Man, that's rough. I know there is good reason to get rid of dead weight, but two things: 1. I had no idea dead weight would be allowed to exist at Tesla. 2. I believe dead weight can be redeemable, if you put in the right effort --not the procedural PIP stuff (which is about improvement as much as incarceration is about rehabilitation) but I mean real effort to rehabilitate a worker. Maybe too much effort for a high flying co.
- tedsanders 9y ago
  Not to waste time pointing out what you already know, but I think it's worth adding that you can be fired without being dead weight. Many firms (especially in law or consulting) have chosen to have pyramid structures with up-or-out policies that fire half the employees every two years. Even if the fired employees are good, this keeps everyone motivated and allows you to churn through employees to find the really excellent ones worth developing. The system is not inherently good or bad, as long as all parties are aware of it.
  - mc32 9y ago
    My understanding was that tech (and I consider Tesla tech even if it's inherently auto) companies were getting away from the stack rank evaluations (save a few). So I'm a bit surprised Tesla is going in that direction. High demand workers have more opportunities and those that can (the good ones) will find a diff job that does not play this kind of churn game. So I'd thought.
    - Joky 9y ago
      There is no stack ranking involved (as far as I know, at least in SW). That's why when an engineer is evaluated as under-performing this is really about their own (manager-perceived) performance vs the expectation, and there is no question about whether they'd be in an exceptional team. Now instead of a formal PIP that we know won't get anywhere, HR isn't shy about letting go dead-weight. My impression is that the default approach from HR when a manager rate someone as under-performing is that we should let them go, unless the manager wants to setup some sort of PIP.
      - dilemma 9y ago
        Occasional underperformance is normal variance as is overperformance. If you can't handle these cases you don't belong in management, and if you fire everyone for underperforming once (your suggestion) you will soon have no workers, and you will cause everyone remaining to underperform.
        Joky 9y ago
        I think you missed the essence of my comment which was "there is no stack ranking and being evaluated as underperforming is then not a result of stack ranking". I'm not sure what you mean by `occasional underperformance`? I'm talking about a yearly performance evaluation, in my opinion an overall underperforming for a year is not "occasional", it shows something systemic. The truth is that sometimes we make bad hiring decision (in my group it has been 2-3%). We try to work with them for a few months, set goals, but ultimately you can't always recover everyone.
        dilemma 9y ago
        A single occurrence is never systemic.
        Joky 9y ago
        You haven't defined what you mean by "single occurrence"? To me being low one month, or during a two months project can be a single occurrence, but that wouldn't lead to a "bad perf review" (at least not in my team). Being clearly underperforming for a complete year without changes after setting up intermediate goals for improvements is not a "single occurrence". When a Sr. Staff which is less productive than other junior engineers, and requires the same level of guidance, something isn't right.
        dilemma 9y ago
        A single bad review.
  - PhasmaFelis 9y ago
    > The system is not inherently good or bad, as long as all parties are aware of it. There's a lot of problems with stack ranking, not least that it discourages cooperation and encourages direct or indirect sabotage (e.g. declining to hire new prospects who you suspect might be better than you). Wikipedia discusses many of the issues: https://www.wikiwand.com/en/Vitality_curve https://www.wikiwand.com/en/Vitality_curve
    - TuringNYC 9y ago
      There is another problem with stack ranking -- I saw this at a previous employer: some people are hired into "4s and 5s" from the onset. I heard some hiring managers upset that they would have to force rank their hand-selected elite team into 1-5 ranks, and upset at the situation, they purposefully hired weak workers with the intention of slotting them into 4 and 5 ranks. Their argument was (i dont agree): - these weak workers wouldnt otherwise have a job - these weak workers get an extra year of employment they "dont deserve" - the strong team members get the 1,2,3 ranks they deserve - the hiring manager is "forced" to do this All that said, seems incredibly unfair to hire people directly into the chopping block without the expectation set from the start.
      - sjg007 9y ago
        It’s an oxymoron.. ‘we only hire the best and stack rank the rest’.
      - kurusii 9y ago
        Wow, that sounds awful. It's a losing situation all around, between the company not getting what it intended (firing the pre-existing dead weight, and getting rid of scapegoats) and, of course, the employees who are duped into joining just to be fired later. Which companies do this?
  - Analemma_ 9y ago
    > Even if the fired employees are good, this keeps everyone motivated and allows you to churn through employees to find the really excellent ones worth developing. The system is not inherently good or bad, as long as all parties are aware of it. Everything about these statements is wrong. Take it from someone who worked at Microsoft before and after they finally smartened up and ditched stack ranking: it's horrible. It creates an atmosphere of paranoia, where people sabotage each other at great cost to the company instead of working together towards common goals. Worse, contra your claim that it weeds out the worst and lets the best rise to the top, what actually happens is the best quickly get sick of the bullshit and leave, while the ones rising to the top are the ones most adept at politics and gaming the system. Stack ranking has no redeeming qualities whatsoever, and if that's really what Tesla is doing it's enough alone to make me more bearish on them. It's that bad.
    - jryle70 9y ago
      I don't know if OP meant stack ranking, but I've definitely seen approx 20% annual turnover at a well known consulting firm, by design. Either you go up or you are out. Not stack ranking, just performance review. Cut throat environment, but the upside is the firm is able to keep the very sharp ones. Also the alumni usually end up at other firms that can potentially become future clients. Seems to work very well for this consulting company.
      - kwhitefoot 9y ago
        > Seems to work very well for this consulting company. But is it working for the rest of us?
        jryle70 9y ago
        Maybe. Maybe not. Those who chose to work for that firm know full well what they're getting into. They hope to make it. 20% of them won't. Not much different than startups?
    - tedsanders 9y ago
      The top three management consulting firms are ranked #1, #3, and #11 on Glassdoor's best places to work. Clearly their up-or-out policies aren't seen as horrible by their own employees. And as a consultant who works at one of those firms, I've never seen anyone sabotage someone else's performance, not once. In fact, you are probably rated best when you help support those around you. Certainly the policy causes stress, but these firms are top destinations for MBAs regardless. https://www.glassdoor.com/Award/Best-Places-to-Work-LST_KQ0,19.htm https://www.glassdoor.com/Award/Best-Places-to-Work-LST_KQ0,...
- DigitalJack 9y ago
  I suppose "dead weight" can be redeemable, however I would say that if you are "dead weight" you probably have the wrong job, and are very likely better off finding something different. As we get older, that's less and less of an option, and often we have to put up with a job rather than enjoy a job.
  - mc32 9y ago
    So if dead weight often is attributable to wrong job (rather than utter incompetence) isn't job redistribution.assignment a more or less manageable issue when you have 33 thousand emps?
- camus2 9y ago
  > dead weight Calling real people "dead weight" is insulting and dehumanizing.
  - mc32 9y ago
    I'm not classifying them as dead weight, Tesla is. If they are firing them, they must in some way believe they are dead weight in some context. It's not an indictment on the employees, it's an indictment of Tesla. On the other hand I believe these people are not dead weight and are redeemable with the right effort.
    - camus2 9y ago
      > I'm not classifying them as dead weight, Tesla is Then use quotes, that's what they are for. Otherwise you are implying you agree with Tesla corporate vocabulary. Let's not be hypocrites, at the end of the day it won't change people's fate, however they are still owed a minimum of respect as human beings, they are not mere cogs in the capitalist engine, no matter what Tesla's management thinks.
      - jryle70 9y ago
        They ARE deadweight as far as the employer is concerned. Nothing disrespectful to them. They may be very good in some aspects and decent human being, but they are at a wrong place. Parting company should benefit both side. Layoff often come with severance package to give those who were let go time to find another job, at least I hope that's what Tesla does.
        camus2 9y ago
        > They ARE deadweight as far as the employer is concerned no that's just how the employer qualify these people, it doesn't mean these people are responsible for Tesla's shitty management or them missing their financial objectives. They are scapegoats Tesla uses to save face in front of their investors.
- caseysoftware 9y ago
  While 300-700 people sounds massive, it's out of 33,000 or about 1-2%. It's not hard to believe that 1-2% of a company were bad hires, couldn't/didn't deliver, or weren't a great match for the job anymore.
  - mc32 9y ago
    Admittedly it's a small fraction. To me, while not a communist by any means, I do think that cos. often simply think about he employee-employer relationship as unidirectional: the employee owes the employer but I see more and the company owes society at large to support its workers, where it can. Not saying they should carry inept unqualified workers, but that they should make some effort to place mal-assigned workers. Make it work for everyone, in other words.
    - jeffdavis 9y ago
      There is some truth there but what you say really only makes sense if you are talking about massive layoffs that would have a major effect on the local labor market.
    - caseysoftware 9y ago
      Without knowing the details - which we never will - we don't know which of them were just in bad positions for them or if they moved 10, 100, or 1000 to better fitting roles or if there were the "better fitting" roles for this group.
    - closeparen 9y ago
      Projecting responsibility for societal well-being onto for-profit employers is crazy. If we think everyone deserves something, we need to provision it directly as a society. Corporations are poor stewards of our welfare, and trying to coerce them into this role (i.e. minimum wage, healthcare mandate, obligation to hold on to unneeded workers like you propose here) has the nasty side-effect of inhibiting potentially beneficial transactions (pushes employers towards automation, encourages them to split decent full-time jobs into several shitty part-time jobs to stay below eligibility thresholds, locks the lowest-value workers out of the market entirely, keeps the product category well below its potential i.e. taxis, etc). If we think people should have at least a certain income (and I do), we need higher taxes and a stronger welfare system, not more labor regulation. If we think everyone deserves good healthcare (and I do) we need single-payer, not an employer mandate. If we think people shouldn't have to face loss of income due to economic conditions, we need to strengthen unemployment insurance, not pressure companies to keep workers they don't want or need. Going down the path of engineering a perfect society by attaching obligations to the employer-employee relationship just disincentives employers from starting those relationships if they can help it.
throwingerman 9y ago
Interesting comments can also be found here: https://news.ycombinator.com/item?id=15470314 https://news.ycombinator.com/item?id=15470314
carlossilva33 9y ago
Wouldn't be surprised if this is to distract people from bad publicity such as production delays and handmaking of parts https://www.wsj.com/articles/behind-teslas-production-delays-parts-of-model-3-were-being-made-by-hand-1507321057 https://www.wsj.com/articles/behind-teslas-production-delays...
tbabb 9y ago
The high estimate was 700 fired. Out of 33,000, that's 2%. Culling the bottom 2% performers seems like a reasonable (even healthy) thing to do; not really an upheaval.
- yahna 9y ago
  Really cause people gave MS endless crap for that style of work. Course I guess all the arguments against this type of thing are countered by "but it's elon"
- tbabb 9y ago
  EDIT: Not healthy, though, if that 2% is a quota, rather than the happenstance fraction of people who fall below the performance bar at evaluation time.
  - imaginenore 9y ago
    2.12% would be a strange quota.
- alphaalpha101 9y ago
  There's nothing healthy or reasonable about firing anyone. If you are firing employees, you have failed.
wpietri 9y ago
Do other companies do this? Unless this is GE-style force ranking, I've never heard of it. If somebody isn't performing well, I have no idea why I'd wait up to a year to deal with it. And it seems terrible for morale (and PR) to have a regular event where a bunch of people will be let go in one block.
- lafar6502 9y ago
  No plan, just some dictatorship in action. They see trouble coming and make some random moves
- Cookingboy 9y ago
  >Do other companies do this? Unless this is GE-style force ranking, I've never heard of it. Probably not right during the ramp up of the most critical product in company's history...
- emodendroket 9y ago
  > 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. Maybe I'm just paranoid but this part kind of smells to me.
  - yahna 9y ago
    Smells like stack ranking. Apparently seeing MS get lambasted over this for years (and having a pretty terrible rep partly because of it) wasn't enough.
  - Iv 9y ago
    If your employer who apparently fires people randomly asked you in a survey if you are happy about your company, would you answer honestly?
    - emodendroket 9y ago
      Haha, well, that's true, but I mostly meant that it looks like they might be being disingenuous about the real reasons for the firing so that they can sidestep the law about notification before a layoff. Especially when you consider that during any layoff they're probably dumping lower performers anyway.
spectrum1234 9y ago
2 key sentences in the article say so much: "Several said Model X, Model S and former SolarCity operations seemed to be targeted." ... "The spokesman said most of the dismissals were administrative and sales positions, and outside of manufacturing." This has little to do with performance or any conspiracies. If your output of products is about to dramatically shift there is no reason to think employment should remain stable among all departments. I would guess if shifting a company's labor requirements was more politically correct, the shift would be much larger. The average pundits head might just explode trying to rationalize the juxtaposition of a clean tech company increasing production rapidly yet 'firing' hundreds. The rational, however, applaud these efforts and the difficult decisions this requires.
- deleted 9y ago
  [deleted]
- Dylan16807 9y ago
  > If your output of products is about to dramatically shift there is no reason to think employment should remain stable among all departments. Among all departments, of course not. But the job of administration and sales for the old model of car is a tremendously close match to administration and sales for the new model. If they didn't have a sufficiently large desire to fire these people, they would transfer most or all of them over. The solarcity firings would possibly represent a shift in labor requirements, but even then they are strongly denying it with the claims of performance-based firings and not layoffs.
- mankash666 9y ago
  Flawed assumption being presented as logic here. The only logical reason for firing would be if the model S,X skills were completely irrelevant to whatever the new model is - which is unlikely.
  - extrapickles 9y ago
    It seems to me that the firings were probably more in the sales side. They have had problems with sales people who refused to do things the ‘Tesla Way’ by either being pushy, or by offering discounts to make their numbers look better.
someonewhocar3s 9y ago
Hire enthusiasm, fire incompetence. Luxurious growth tactic.
fakenwse 9y ago
How morale used to be improved: "You've been promoted! Keep up the good work!" How Tesla improves morale: "Congrats! You're not with the group that got fired! For now..."
rdlecler1 9y ago
Hiring managers are going to remember this. I hope that it was performance related and that Tesla wasn’t just trying to save face with investors.
Steeeve 9y ago
I'm not a fan of this style of management at all. I won't knowingly go to work for a company that behaves in this manner. I've read that Netflix does it, and I've seen inferences that they acquired the practice from Disney. If you have a low performing employee that you want to get rid of, fine. Arbitrarily destroying the lives of a percentage of your workforce in an annual purge is not OK. People always seem to put Musk on a pedestal. Personally, I've always been (and always will be) leery of a company run by a PayPal founder.
- lacker 9y ago
  What style - firing 2% of your employees in a given year? That is not a very high rate for a large company. It's only news because everything Tesla is news.
  - Steeeve 9y ago
    2% turnover over the course of a year might not seem high. Firing 2% of your workforce in a single day is.
    - JumpCrisscross 9y ago
      Research shows the long-term effects of disruption are a function of its duration. (If you’re looking for the paper I am referencing, it was an IMF paper on the effects of conflict on economic productivity.) Short and harsh is better than long and simmering.
      - Steeeve 9y ago
        I get that. If there's a layoff or a re-org going on, getting it all done at once is better. The idea of losing poor performers on an annual basis is the one I cannot get behind. I am perfectly fine with the idea that someone who isn't doing there job loses it. Where I have a problem is that once a year managers are told to dump their lowest performing people. The reality is that people will game the system. They will hire with the intention of firing. They will fire people who are adversarial either personally or professionally. They will fire people for arbitrary reasons. They will fire people for personal reasons. While tech work is easy to come by right now, it does not mean that the experience will be easy to deal with. Each person who was fired will now have to explain themselves to their families and their prospective employers. I doubt many of them took the job in the first place knowing it was not a stable environment.
Animats 9y ago
High-level executives at Tesla are bailing out. Back when Musk announced his overoptimistic production schedule for the Model 3, his two top production executives quit.[1] Nine more high-level executives have left so far this year.[2] [1] https://www.bloomberg.com/news/articles/2016-05-04/two-tesla-production-chiefs-to-leave-ahead-of-biggest-challenge-yet https://www.bloomberg.com/news/articles/2016-05-04/two-tesla... [2] https://www.bizjournals.com/sanjose/news/2017/08/02/tesla-tsla-executive-exodus-kurt-kelty-battery.html https://www.bizjournals.com/sanjose/news/2017/08/02/tesla-ts...
- sien 9y ago
  That's really interesting. The Economist ran a story earlier about how aggressive Musk's finances are and how there was weird finance going on and that Musk was simultaneously trying to keep things afloat, keep on a super aggressive schedule and keep control. https://www.economist.com/news/business/21709061-entrepreneurs-finances-are-jaw-dropping-inventive-and-combustible-his-space https://www.economist.com/news/business/21709061-entrepreneu... Perhaps the wheels are starting to come off. Even if they do, it's been amazing what has been achieved.
  - agumonkey 9y ago
    From afar, it seems that's just how musk did about everything. SpaceX was a potential catastrophy, but they passed the tipping point successfully. Everything Musk does is "adventure" like, which is unsurprisingly good for employee stability. It's a bit like Jobs at Apple. You're gonna suffer, maybe get fire but you worked on "that" project.
    - deleted 9y ago
      [deleted]
  - Animats 9y ago
    Space-X has the advantage of competing with high-cost producers. Tesla is trying to move downmarket, where they have to compete with Chevy. Tesla should be able to make a good car. The question is whether they can make money on the Model 3. In reality, Tesla's pricing strategy is to charge $50K-$60K for the Model 3.[1] This is BMW / Mercedes-Benz territory. [1] https://www.fool.com/investing/2017/08/06/surprise-the-real-tesla-model-3-doesnt-cost-35000.aspx https://www.fool.com/investing/2017/08/06/surprise-the-real-...
dmode 9y ago
I know someone who just got fired in this round at Tesla. His manager never communicated to him that he was a bad performer. He was not on a PIP or any performance plans. He was also working on Model 3. One fine morning his manager called him and said this would be his last day. He is a single income earner and was so shocked by this news that he is getting borderline depressed. They offered only 2 weeks of severance.
- viraptor 9y ago
  Do you know if the severance was based on time worked so far, or 2 weeks for everybody? But yeah, this is terrible. If you don't expect you're going to be fired for bad performance, that's a company's failure, not yours.
  - dmode 9y ago
    He worked for 2 years. I am not sure what severance is based on. Also, with this article, Tesla pretty much trashed every employee they fired by publicly saying they are bad performers. Imagine finding a job now that you have been labelled a poor performer
    - dennisgorelik 9y ago
      They are bad performers for Tesla. That does not mean they are bad performers for other companies. The acceptance threshold at Tesla could be at a very different level.
- metaphor 9y ago
  > I know someone who just got fired in this round at Tesla. ... They offered only 2 weeks of severance. Fired or layed off? I've never experienced either, but I always thought severance pay was exclusive to the latter.
  - dmode 9y ago
    I am not sure of the difference between firing and laying off. Manager basically said that today is last day, bring in your equipment etc
SeanDav 9y ago
This sort of behaviour is quite common in companies, so I can't help wondering if it is true that studies have shown a significant percentage of Silicon Valley CEO's and company executives are psychopaths. https://www.cnbc.com/2017/03/21/apparently-psychopaths-make-good-ceos.html https://www.cnbc.com/2017/03/21/apparently-psychopaths-make-... https://www.theguardian.com/technology/2017/mar/15/silicon-valley-psychopath-ceo-sxsw-panel https://www.theguardian.com/technology/2017/mar/15/silicon-v... https://en.wikipedia.org/wiki/Psychopathy_in_the_workplace https://en.wikipedia.org/wiki/Psychopathy_in_the_workplace https://www.washingtonpost.com/news/on-small-business/wp/2016/09/16/gene-marks-21-percent-of-ceos-are-psychopaths-only-21-percent/ https://www.washingtonpost.com/news/on-small-business/wp/201...
- JabavuAdams 9y ago
  Why would they have to be psychopaths to justify such behaviour? A belief that the project > people suffices. Can you not think of any project that is more important than the individual workers making it happen? Also, I suspect they would react differently if e.g. the mass-laid-off committed mass suicide, whereas I doubt a psychopath would.
xedarius 9y ago
It's quite common in investment banking. A bunch of them do it. https://www.quora.com/Could-Goldman-Sachs-strategy-of-firing-the-bottom-5-10-of-staff-every-year-work-for-all-businesses https://www.quora.com/Could-Goldman-Sachs-strategy-of-firing... I think Barclays also used to do it. It's shitty thing to do to people. But you don't need me to tell you they're shitty companies.
ape4 9y ago
Its like the "Survivor" TV show. Or "The Apprentice" - hey who was the host of that?
nstj 9y ago
There seems to be some confusion/ambiguity around whether these layoffs were focused on the Fremont Tesla factory or company wide. If they were focused on 1 factory that would be weird - if they were company wide that would be within the bounds of normalcy. Can anyone illuminate?
praulv 9y ago
I used to be of the opinion that a company should have full right to drop dead weight as and when it chooses fit. The thing we forget is we, citizens, pay extortionate taxes to run a government which provides favourable incentives for companies to form and provide employment. They should, in return, be obliged to demonstrate some level of mutual benefit to employees, rather than purely incentivising shareholders' and directors' bonuses.
- nopzor 9y ago
  So companies should follow the law? I think you're really arguing for better employee protection in the USA ?
  - penguinUzer 9y ago
    I interpreted the post as meaning when a company is given millions of dollars in tax breaks, i.e., build your new factory here and your income tax is abated for X years, then they should be on the hook for when they let go of employees. In theory I agree and the company should be on the hook to provide training or assistance.
    - nopzor 9y ago
      So why weren't employee protection or training part of the tax break? Same point.
      - Joky 9y ago
        Why would everyone's taxes be used to protect a few workers? Especially (apparently) not the greatest... If the company is doing well it'll continue to hire and provide employment to others. As a society, I believe we could argue that we shouldn't subsidize companies that offshore the work, but otherwise if we want help for employees that are let go (training, assistance, ...) better make it a public service.
CrLf 9y ago
The Romans called this style of management "decimation." It's unfortunate that it's still fashionable in the 21st century. Also, this sounds straight out of the Ministry of Peace: "It also said the moves have generally boosted worker morale"
- jaclaz 9y ago
  >The Romans called this style of management "decimation." To be fair to the Romans, decimation was a (correct, if the adjective can be used in this case) random process and was limited to the army. The idea was that when a large group (a cohort or 480 people) severely underperformed (it happened in case of rebellion/mutiny or blatant cowardy), AFTER having executed on the spot those that led the rebellion or that were manifestly coward or leading the mutiny, the remaining were divided in groups of ten, then in each group one was selected by drawing lots, and was executed by the remaining 9 comrades. This had two advantages (in the eye of the Roman leaders), the army would not have been exterminated (unlike in more "traditional" repression of rebellions) and the 9/10 remaining would have been motivated to contribute to the group. So, there was not an evaluation of the performance (or non-performance) of the single, the responsability was attributed to the group as a whole, and then out of the 10 people subset the 1 to be killed was chosen by Fate.
kryptiskt 9y ago
The unforgivable action here is the badmouthing of the workers that they fired, gloating about increased morale. Not even Uber would sink that low. This crap from management shouldn't be tolerated, much less celebrated.
- TStowe 9y ago
  That tends to be one cheap option to keep psychologically tied to the company. I'm not for or against it, but I imagine being one of those workers it would suck. Still, I'm all for automating as much as possible, and in the case of workforce reductions, gloating over the fact that things move so much more quickly and accurately. I do like Elon Musks's attitude toward people wasting time. And this is head and shoulders above what goes on in China, India factory conditions. Not saying no one should whine and bitch and moan about it, but truly, it's not all that bad.
thegayngler 9y ago
So basically what you have is Musk over promising and under delivering but it's the worker's fault he could not meet unrealistic deadlines he set himself ignoring all reality. Musk set Tesla up for failure and now the non-management people have to suffer as a result. The fact that this is even being talked about right now may hurt Tesla's chances of hiring great future employees...especially with that scathing article basically saying they were being fired for bad performance and not laid off. Can you still get unemployment if you are fired for unsatisfactory performance?

184 points by fmihaila 9y ago

mc32 9y ago

Man, that's rough. I know there is good reason to get rid of dead weight, but two things: 1. I had no idea dead weight would be allowed to exist at Tesla. 2. I believe dead weight can be redeemable, if you put in the right effort --not the procedural PIP stuff (which is about improvement as much as incarceration is about rehabilitation) but I mean real effort to rehabilitate a worker. Maybe too much effort for a high flying co.

tedsanders 9y ago
Not to waste time pointing out what you already know, but I think it's worth adding that you can be fired without being dead weight. Many firms (especially in law or consulting) have chosen to have pyramid structures with up-or-out policies that fire half the employees every two years. Even if the fired employees are good, this keeps everyone motivated and allows you to churn through employees to find the really excellent ones worth developing. The system is not inherently good or bad, as long as all parties are aware of it.
- mc32 9y ago
  My understanding was that tech (and I consider Tesla tech even if it's inherently auto) companies were getting away from the stack rank evaluations (save a few). So I'm a bit surprised Tesla is going in that direction. High demand workers have more opportunities and those that can (the good ones) will find a diff job that does not play this kind of churn game. So I'd thought.
  - Joky 9y ago
    There is no stack ranking involved (as far as I know, at least in SW). That's why when an engineer is evaluated as under-performing this is really about their own (manager-perceived) performance vs the expectation, and there is no question about whether they'd be in an exceptional team. Now instead of a formal PIP that we know won't get anywhere, HR isn't shy about letting go dead-weight. My impression is that the default approach from HR when a manager rate someone as under-performing is that we should let them go, unless the manager wants to setup some sort of PIP.
    - dilemma 9y ago
      Occasional underperformance is normal variance as is overperformance. If you can't handle these cases you don't belong in management, and if you fire everyone for underperforming once (your suggestion) you will soon have no workers, and you will cause everyone remaining to underperform.
      - Joky 9y ago
        I think you missed the essence of my comment which was "there is no stack ranking and being evaluated as underperforming is then not a result of stack ranking". I'm not sure what you mean by `occasional underperformance`? I'm talking about a yearly performance evaluation, in my opinion an overall underperforming for a year is not "occasional", it shows something systemic. The truth is that sometimes we make bad hiring decision (in my group it has been 2-3%). We try to work with them for a few months, set goals, but ultimately you can't always recover everyone.
        dilemma 9y ago
        A single occurrence is never systemic.
        Joky 9y ago
        You haven't defined what you mean by "single occurrence"? To me being low one month, or during a two months project can be a single occurrence, but that wouldn't lead to a "bad perf review" (at least not in my team). Being clearly underperforming for a complete year without changes after setting up intermediate goals for improvements is not a "single occurrence". When a Sr. Staff which is less productive than other junior engineers, and requires the same level of guidance, something isn't right.
        dilemma 9y ago
        A single bad review.
- PhasmaFelis 9y ago
  > The system is not inherently good or bad, as long as all parties are aware of it. There's a lot of problems with stack ranking, not least that it discourages cooperation and encourages direct or indirect sabotage (e.g. declining to hire new prospects who you suspect might be better than you). Wikipedia discusses many of the issues: https://www.wikiwand.com/en/Vitality_curve https://www.wikiwand.com/en/Vitality_curve
  - TuringNYC 9y ago
    There is another problem with stack ranking -- I saw this at a previous employer: some people are hired into "4s and 5s" from the onset. I heard some hiring managers upset that they would have to force rank their hand-selected elite team into 1-5 ranks, and upset at the situation, they purposefully hired weak workers with the intention of slotting them into 4 and 5 ranks. Their argument was (i dont agree): - these weak workers wouldnt otherwise have a job - these weak workers get an extra year of employment they "dont deserve" - the strong team members get the 1,2,3 ranks they deserve - the hiring manager is "forced" to do this All that said, seems incredibly unfair to hire people directly into the chopping block without the expectation set from the start.
    - sjg007 9y ago
      It’s an oxymoron.. ‘we only hire the best and stack rank the rest’.
    - kurusii 9y ago
      Wow, that sounds awful. It's a losing situation all around, between the company not getting what it intended (firing the pre-existing dead weight, and getting rid of scapegoats) and, of course, the employees who are duped into joining just to be fired later. Which companies do this?
- Analemma_ 9y ago
  > Even if the fired employees are good, this keeps everyone motivated and allows you to churn through employees to find the really excellent ones worth developing. The system is not inherently good or bad, as long as all parties are aware of it. Everything about these statements is wrong. Take it from someone who worked at Microsoft before and after they finally smartened up and ditched stack ranking: it's horrible. It creates an atmosphere of paranoia, where people sabotage each other at great cost to the company instead of working together towards common goals. Worse, contra your claim that it weeds out the worst and lets the best rise to the top, what actually happens is the best quickly get sick of the bullshit and leave, while the ones rising to the top are the ones most adept at politics and gaming the system. Stack ranking has no redeeming qualities whatsoever, and if that's really what Tesla is doing it's enough alone to make me more bearish on them. It's that bad.
  - jryle70 9y ago
    I don't know if OP meant stack ranking, but I've definitely seen approx 20% annual turnover at a well known consulting firm, by design. Either you go up or you are out. Not stack ranking, just performance review. Cut throat environment, but the upside is the firm is able to keep the very sharp ones. Also the alumni usually end up at other firms that can potentially become future clients. Seems to work very well for this consulting company.
    - kwhitefoot 9y ago
      > Seems to work very well for this consulting company. But is it working for the rest of us?
      - jryle70 9y ago
        Maybe. Maybe not. Those who chose to work for that firm know full well what they're getting into. They hope to make it. 20% of them won't. Not much different than startups?
  - tedsanders 9y ago
    The top three management consulting firms are ranked #1, #3, and #11 on Glassdoor's best places to work. Clearly their up-or-out policies aren't seen as horrible by their own employees. And as a consultant who works at one of those firms, I've never seen anyone sabotage someone else's performance, not once. In fact, you are probably rated best when you help support those around you. Certainly the policy causes stress, but these firms are top destinations for MBAs regardless. https://www.glassdoor.com/Award/Best-Places-to-Work-LST_KQ0,19.htm https://www.glassdoor.com/Award/Best-Places-to-Work-LST_KQ0,...
DigitalJack 9y ago
I suppose "dead weight" can be redeemable, however I would say that if you are "dead weight" you probably have the wrong job, and are very likely better off finding something different. As we get older, that's less and less of an option, and often we have to put up with a job rather than enjoy a job.
- mc32 9y ago
  So if dead weight often is attributable to wrong job (rather than utter incompetence) isn't job redistribution.assignment a more or less manageable issue when you have 33 thousand emps?
camus2 9y ago
> dead weight Calling real people "dead weight" is insulting and dehumanizing.
- mc32 9y ago
  I'm not classifying them as dead weight, Tesla is. If they are firing them, they must in some way believe they are dead weight in some context. It's not an indictment on the employees, it's an indictment of Tesla. On the other hand I believe these people are not dead weight and are redeemable with the right effort.
  - camus2 9y ago
    > I'm not classifying them as dead weight, Tesla is Then use quotes, that's what they are for. Otherwise you are implying you agree with Tesla corporate vocabulary. Let's not be hypocrites, at the end of the day it won't change people's fate, however they are still owed a minimum of respect as human beings, they are not mere cogs in the capitalist engine, no matter what Tesla's management thinks.
    - jryle70 9y ago
      They ARE deadweight as far as the employer is concerned. Nothing disrespectful to them. They may be very good in some aspects and decent human being, but they are at a wrong place. Parting company should benefit both side. Layoff often come with severance package to give those who were let go time to find another job, at least I hope that's what Tesla does.
      - camus2 9y ago
        > They ARE deadweight as far as the employer is concerned no that's just how the employer qualify these people, it doesn't mean these people are responsible for Tesla's shitty management or them missing their financial objectives. They are scapegoats Tesla uses to save face in front of their investors.
caseysoftware 9y ago
While 300-700 people sounds massive, it's out of 33,000 or about 1-2%. It's not hard to believe that 1-2% of a company were bad hires, couldn't/didn't deliver, or weren't a great match for the job anymore.
- mc32 9y ago
  Admittedly it's a small fraction. To me, while not a communist by any means, I do think that cos. often simply think about he employee-employer relationship as unidirectional: the employee owes the employer but I see more and the company owes society at large to support its workers, where it can. Not saying they should carry inept unqualified workers, but that they should make some effort to place mal-assigned workers. Make it work for everyone, in other words.
  - jeffdavis 9y ago
    There is some truth there but what you say really only makes sense if you are talking about massive layoffs that would have a major effect on the local labor market.
  - caseysoftware 9y ago
    Without knowing the details - which we never will - we don't know which of them were just in bad positions for them or if they moved 10, 100, or 1000 to better fitting roles or if there were the "better fitting" roles for this group.
  - closeparen 9y ago
    Projecting responsibility for societal well-being onto for-profit employers is crazy. If we think everyone deserves something, we need to provision it directly as a society. Corporations are poor stewards of our welfare, and trying to coerce them into this role (i.e. minimum wage, healthcare mandate, obligation to hold on to unneeded workers like you propose here) has the nasty side-effect of inhibiting potentially beneficial transactions (pushes employers towards automation, encourages them to split decent full-time jobs into several shitty part-time jobs to stay below eligibility thresholds, locks the lowest-value workers out of the market entirely, keeps the product category well below its potential i.e. taxis, etc). If we think people should have at least a certain income (and I do), we need higher taxes and a stronger welfare system, not more labor regulation. If we think everyone deserves good healthcare (and I do) we need single-payer, not an employer mandate. If we think people shouldn't have to face loss of income due to economic conditions, we need to strengthen unemployment insurance, not pressure companies to keep workers they don't want or need. Going down the path of engineering a perfect society by attaching obligations to the employer-employee relationship just disincentives employers from starting those relationships if they can help it.

throwingerman 9y ago

Interesting comments can also be found here: https://news.ycombinator.com/item?id=15470314 https://news.ycombinator.com/item?id=15470314

carlossilva33 9y ago

Wouldn't be surprised if this is to distract people from bad publicity such as production delays and handmaking of parts https://www.wsj.com/articles/behind-teslas-production-delays-parts-of-model-3-were-being-made-by-hand-1507321057 https://www.wsj.com/articles/behind-teslas-production-delays...

tbabb 9y ago

The high estimate was 700 fired. Out of 33,000, that's 2%. Culling the bottom 2% performers seems like a reasonable (even healthy) thing to do; not really an upheaval.

yahna 9y ago
Really cause people gave MS endless crap for that style of work. Course I guess all the arguments against this type of thing are countered by "but it's elon"
tbabb 9y ago
EDIT: Not healthy, though, if that 2% is a quota, rather than the happenstance fraction of people who fall below the performance bar at evaluation time.
- imaginenore 9y ago
  2.12% would be a strange quota.
alphaalpha101 9y ago
There's nothing healthy or reasonable about firing anyone. If you are firing employees, you have failed.

wpietri 9y ago

Do other companies do this? Unless this is GE-style force ranking, I've never heard of it. If somebody isn't performing well, I have no idea why I'd wait up to a year to deal with it. And it seems terrible for morale (and PR) to have a regular event where a bunch of people will be let go in one block.

lafar6502 9y ago
No plan, just some dictatorship in action. They see trouble coming and make some random moves
Cookingboy 9y ago
>Do other companies do this? Unless this is GE-style force ranking, I've never heard of it. Probably not right during the ramp up of the most critical product in company's history...
emodendroket 9y ago
> 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. Maybe I'm just paranoid but this part kind of smells to me.
- yahna 9y ago
  Smells like stack ranking. Apparently seeing MS get lambasted over this for years (and having a pretty terrible rep partly because of it) wasn't enough.
- Iv 9y ago
  If your employer who apparently fires people randomly asked you in a survey if you are happy about your company, would you answer honestly?
  - emodendroket 9y ago
    Haha, well, that's true, but I mostly meant that it looks like they might be being disingenuous about the real reasons for the firing so that they can sidestep the law about notification before a layoff. Especially when you consider that during any layoff they're probably dumping lower performers anyway.

spectrum1234 9y ago

2 key sentences in the article say so much: "Several said Model X, Model S and former SolarCity operations seemed to be targeted." ... "The spokesman said most of the dismissals were administrative and sales positions, and outside of manufacturing." This has little to do with performance or any conspiracies. If your output of products is about to dramatically shift there is no reason to think employment should remain stable among all departments. I would guess if shifting a company's labor requirements was more politically correct, the shift would be much larger. The average pundits head might just explode trying to rationalize the juxtaposition of a clean tech company increasing production rapidly yet 'firing' hundreds. The rational, however, applaud these efforts and the difficult decisions this requires.

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Dylan16807 9y ago
> If your output of products is about to dramatically shift there is no reason to think employment should remain stable among all departments. Among all departments, of course not. But the job of administration and sales for the old model of car is a tremendously close match to administration and sales for the new model. If they didn't have a sufficiently large desire to fire these people, they would transfer most or all of them over. The solarcity firings would possibly represent a shift in labor requirements, but even then they are strongly denying it with the claims of performance-based firings and not layoffs.
mankash666 9y ago
Flawed assumption being presented as logic here. The only logical reason for firing would be if the model S,X skills were completely irrelevant to whatever the new model is - which is unlikely.
- extrapickles 9y ago
  It seems to me that the firings were probably more in the sales side. They have had problems with sales people who refused to do things the ‘Tesla Way’ by either being pushy, or by offering discounts to make their numbers look better.

someonewhocar3s 9y ago

Hire enthusiasm, fire incompetence. Luxurious growth tactic.

fakenwse 9y ago

How morale used to be improved: "You've been promoted! Keep up the good work!" How Tesla improves morale: "Congrats! You're not with the group that got fired! For now..."

rdlecler1 9y ago

Hiring managers are going to remember this. I hope that it was performance related and that Tesla wasn’t just trying to save face with investors.

Steeeve 9y ago

I'm not a fan of this style of management at all. I won't knowingly go to work for a company that behaves in this manner. I've read that Netflix does it, and I've seen inferences that they acquired the practice from Disney. If you have a low performing employee that you want to get rid of, fine. Arbitrarily destroying the lives of a percentage of your workforce in an annual purge is not OK. People always seem to put Musk on a pedestal. Personally, I've always been (and always will be) leery of a company run by a PayPal founder.

lacker 9y ago
What style - firing 2% of your employees in a given year? That is not a very high rate for a large company. It's only news because everything Tesla is news.
- Steeeve 9y ago
  2% turnover over the course of a year might not seem high. Firing 2% of your workforce in a single day is.
  - JumpCrisscross 9y ago
    Research shows the long-term effects of disruption are a function of its duration. (If you’re looking for the paper I am referencing, it was an IMF paper on the effects of conflict on economic productivity.) Short and harsh is better than long and simmering.
    - Steeeve 9y ago
      I get that. If there's a layoff or a re-org going on, getting it all done at once is better. The idea of losing poor performers on an annual basis is the one I cannot get behind. I am perfectly fine with the idea that someone who isn't doing there job loses it. Where I have a problem is that once a year managers are told to dump their lowest performing people. The reality is that people will game the system. They will hire with the intention of firing. They will fire people who are adversarial either personally or professionally. They will fire people for arbitrary reasons. They will fire people for personal reasons. While tech work is easy to come by right now, it does not mean that the experience will be easy to deal with. Each person who was fired will now have to explain themselves to their families and their prospective employers. I doubt many of them took the job in the first place knowing it was not a stable environment.

Animats 9y ago

High-level executives at Tesla are bailing out. Back when Musk announced his overoptimistic production schedule for the Model 3, his two top production executives quit.[1] Nine more high-level executives have left so far this year.[2] [1] https://www.bloomberg.com/news/articles/2016-05-04/two-tesla-production-chiefs-to-leave-ahead-of-biggest-challenge-yet https://www.bloomberg.com/news/articles/2016-05-04/two-tesla... [2] https://www.bizjournals.com/sanjose/news/2017/08/02/tesla-tsla-executive-exodus-kurt-kelty-battery.html https://www.bizjournals.com/sanjose/news/2017/08/02/tesla-ts...

sien 9y ago
That's really interesting. The Economist ran a story earlier about how aggressive Musk's finances are and how there was weird finance going on and that Musk was simultaneously trying to keep things afloat, keep on a super aggressive schedule and keep control. https://www.economist.com/news/business/21709061-entrepreneurs-finances-are-jaw-dropping-inventive-and-combustible-his-space https://www.economist.com/news/business/21709061-entrepreneu... Perhaps the wheels are starting to come off. Even if they do, it's been amazing what has been achieved.
- agumonkey 9y ago
  From afar, it seems that's just how musk did about everything. SpaceX was a potential catastrophy, but they passed the tipping point successfully. Everything Musk does is "adventure" like, which is unsurprisingly good for employee stability. It's a bit like Jobs at Apple. You're gonna suffer, maybe get fire but you worked on "that" project.
  - deleted 9y ago
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- Animats 9y ago
  Space-X has the advantage of competing with high-cost producers. Tesla is trying to move downmarket, where they have to compete with Chevy. Tesla should be able to make a good car. The question is whether they can make money on the Model 3. In reality, Tesla's pricing strategy is to charge $50K-$60K for the Model 3.[1] This is BMW / Mercedes-Benz territory. [1] https://www.fool.com/investing/2017/08/06/surprise-the-real-tesla-model-3-doesnt-cost-35000.aspx https://www.fool.com/investing/2017/08/06/surprise-the-real-...

dmode 9y ago

I know someone who just got fired in this round at Tesla. His manager never communicated to him that he was a bad performer. He was not on a PIP or any performance plans. He was also working on Model 3. One fine morning his manager called him and said this would be his last day. He is a single income earner and was so shocked by this news that he is getting borderline depressed. They offered only 2 weeks of severance.

viraptor 9y ago
Do you know if the severance was based on time worked so far, or 2 weeks for everybody? But yeah, this is terrible. If you don't expect you're going to be fired for bad performance, that's a company's failure, not yours.
- dmode 9y ago
  He worked for 2 years. I am not sure what severance is based on. Also, with this article, Tesla pretty much trashed every employee they fired by publicly saying they are bad performers. Imagine finding a job now that you have been labelled a poor performer
  - dennisgorelik 9y ago
    They are bad performers for Tesla. That does not mean they are bad performers for other companies. The acceptance threshold at Tesla could be at a very different level.
metaphor 9y ago
> I know someone who just got fired in this round at Tesla. ... They offered only 2 weeks of severance. Fired or layed off? I've never experienced either, but I always thought severance pay was exclusive to the latter.
- dmode 9y ago
  I am not sure of the difference between firing and laying off. Manager basically said that today is last day, bring in your equipment etc

SeanDav 9y ago

This sort of behaviour is quite common in companies, so I can't help wondering if it is true that studies have shown a significant percentage of Silicon Valley CEO's and company executives are psychopaths. https://www.cnbc.com/2017/03/21/apparently-psychopaths-make-good-ceos.html https://www.cnbc.com/2017/03/21/apparently-psychopaths-make-... https://www.theguardian.com/technology/2017/mar/15/silicon-valley-psychopath-ceo-sxsw-panel https://www.theguardian.com/technology/2017/mar/15/silicon-v... https://en.wikipedia.org/wiki/Psychopathy_in_the_workplace https://en.wikipedia.org/wiki/Psychopathy_in_the_workplace https://www.washingtonpost.com/news/on-small-business/wp/2016/09/16/gene-marks-21-percent-of-ceos-are-psychopaths-only-21-percent/ https://www.washingtonpost.com/news/on-small-business/wp/201...

JabavuAdams 9y ago
Why would they have to be psychopaths to justify such behaviour? A belief that the project > people suffices. Can you not think of any project that is more important than the individual workers making it happen? Also, I suspect they would react differently if e.g. the mass-laid-off committed mass suicide, whereas I doubt a psychopath would.

xedarius 9y ago

It's quite common in investment banking. A bunch of them do it. https://www.quora.com/Could-Goldman-Sachs-strategy-of-firing-the-bottom-5-10-of-staff-every-year-work-for-all-businesses https://www.quora.com/Could-Goldman-Sachs-strategy-of-firing... I think Barclays also used to do it. It's shitty thing to do to people. But you don't need me to tell you they're shitty companies.

ape4 9y ago

Its like the "Survivor" TV show. Or "The Apprentice" - hey who was the host of that?

nstj 9y ago

There seems to be some confusion/ambiguity around whether these layoffs were focused on the Fremont Tesla factory or company wide. If they were focused on 1 factory that would be weird - if they were company wide that would be within the bounds of normalcy. Can anyone illuminate?

praulv 9y ago

I used to be of the opinion that a company should have full right to drop dead weight as and when it chooses fit. The thing we forget is we, citizens, pay extortionate taxes to run a government which provides favourable incentives for companies to form and provide employment. They should, in return, be obliged to demonstrate some level of mutual benefit to employees, rather than purely incentivising shareholders' and directors' bonuses.

nopzor 9y ago
So companies should follow the law? I think you're really arguing for better employee protection in the USA ?
- penguinUzer 9y ago
  I interpreted the post as meaning when a company is given millions of dollars in tax breaks, i.e., build your new factory here and your income tax is abated for X years, then they should be on the hook for when they let go of employees. In theory I agree and the company should be on the hook to provide training or assistance.
  - nopzor 9y ago
    So why weren't employee protection or training part of the tax break? Same point.
    - Joky 9y ago
      Why would everyone's taxes be used to protect a few workers? Especially (apparently) not the greatest... If the company is doing well it'll continue to hire and provide employment to others. As a society, I believe we could argue that we shouldn't subsidize companies that offshore the work, but otherwise if we want help for employees that are let go (training, assistance, ...) better make it a public service.

CrLf 9y ago

The Romans called this style of management "decimation." It's unfortunate that it's still fashionable in the 21st century. Also, this sounds straight out of the Ministry of Peace: "It also said the moves have generally boosted worker morale"

jaclaz 9y ago
>The Romans called this style of management "decimation." To be fair to the Romans, decimation was a (correct, if the adjective can be used in this case) random process and was limited to the army. The idea was that when a large group (a cohort or 480 people) severely underperformed (it happened in case of rebellion/mutiny or blatant cowardy), AFTER having executed on the spot those that led the rebellion or that were manifestly coward or leading the mutiny, the remaining were divided in groups of ten, then in each group one was selected by drawing lots, and was executed by the remaining 9 comrades. This had two advantages (in the eye of the Roman leaders), the army would not have been exterminated (unlike in more "traditional" repression of rebellions) and the 9/10 remaining would have been motivated to contribute to the group. So, there was not an evaluation of the performance (or non-performance) of the single, the responsability was attributed to the group as a whole, and then out of the 10 people subset the 1 to be killed was chosen by Fate.

kryptiskt 9y ago

The unforgivable action here is the badmouthing of the workers that they fired, gloating about increased morale. Not even Uber would sink that low. This crap from management shouldn't be tolerated, much less celebrated.

TStowe 9y ago
That tends to be one cheap option to keep psychologically tied to the company. I'm not for or against it, but I imagine being one of those workers it would suck. Still, I'm all for automating as much as possible, and in the case of workforce reductions, gloating over the fact that things move so much more quickly and accurately. I do like Elon Musks's attitude toward people wasting time. And this is head and shoulders above what goes on in China, India factory conditions. Not saying no one should whine and bitch and moan about it, but truly, it's not all that bad.

thegayngler 9y ago

So basically what you have is Musk over promising and under delivering but it's the worker's fault he could not meet unrealistic deadlines he set himself ignoring all reality. Musk set Tesla up for failure and now the non-management people have to suffer as a result. The fact that this is even being talked about right now may hurt Tesla's chances of hiring great future employees...especially with that scathing article basically saying they were being fired for bad performance and not laid off. Can you still get unemployment if you are fired for unsatisfactory performance?