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Tesla is laying off ‘about 9%’ of its workforce as it ‘restructures’ the company
- decacorn 8y agoah yes, the only way to profit is to sack thousands of faithful employees who helped you launch multiple products.
- whatok 8y agoClaims no production staff were affected. Don't know the employee breakdown but imagine production is a huge portion of it. Hard to believe entire other divisions weren't completely eliminated if production not touched.
- paulpauper 8y agocould be sales and marketing
- moolcool 8y agoI thought Tesla had no marketing dept?
- bduerst 8y agoI'm not sure where you heard that: https://g.co/kgs/3va2C3 https://g.co/kgs/3va2C3
- elicash 8y agoMusk has said no advertising. They do have marketing staff. https://www.investopedia.com/terms/f/four-ps.asp https://www.investopedia.com/terms/f/four-ps.asp
- ameister14 8y agoThey don't have an advertising dept. They have a small marketing team.
- bjl 8y agoWhere do people get this from? Their filings clearly state they spend millions a quarter on marketing.
- makomk 8y agoProbably from half-remembered Tesla marketing spiel, at a guess.
- george_morgan 8y agoConsidering demand for product is outstripping their ability to produce product, their sales & marketing teams are setting a high standard of work the rest of the company has yet to meet. Feels a little unfair if they were the ones getting axed.
- deleted 8y ago[deleted]
- JohnJamesRambo 8y agoOr maybe they aren't needed at all? Most people I know that want a Tesla have wanted one forever and weren't really coerced into it by sales and marketing.
- dannyw 8y agoThe best marketing is the one you don’t realise.
- mygo 8y agoThey may not have had a sales guy come knocking on their front door, but if you think they weren’t marketed to, then Tesla did an excellent job of marketing.
- george_morgan 8y agoAh, but marketing isn’t simply coercion or persuasion. For instance, if you’re gathering requirements from customers before, during and after the development of a product you’re doing marketing whether you realise it or not.
- sdhgaiojfsa 8y agoAll other things being equal, the more compelling the product, the less you need to market it to achieve a given level of interest. Tesla cars are SUPER compelling on a lot of levels. I would be surprised to hear that they need the same level of marketing effort as weaker entrants from other car companies.
- deleted 8y ago[deleted]
- gk1 8y agoGiven they admitted to over-relying on automation, I doubt they'd be cutting production staff now. It's not difficult to find 9% of the workforce in other departments: sales, marketing, operations, engineering, etc.
- jonknee 8y agoI think most companies would have a hard time finding 3,500 people to fire and not have it effect anything. Especially ones that describe themselves as a "growth company".
- jVinc 8y agoMost companies would have a hard time finding that many people to fire because they weren't that big. Most companies would have no problem finding 1 in 10 to fire in a downsizing.
- madeofpalk 8y agoAlso given they're having trouble with that manufacturing output, I can't imagine firing those people would help things out. AFAIK there's no such thing has the "reverse mythical man month" - removing people from a late running project speeds it up.
- sulam 8y agoThere's definitely cases where removing a person from a project speeds it up. Just to name a few: * the person removed is a distraction to the team in some way, possibly outside of their control * the team is over the two-pizza limit, and coordination costs are out of control * roles between individuals aren't clear, and removing one of them makes it obvious, removing a source of confusion [edit: added some examples]
- sobani 8y ago> the two-pizza limit OT, but can someone please explain this to me? From what I understand this is a team size that you can still feed with two pizzas. But how is this different from just saying "the two-person limit"? When I'm with friends, we order one pizza per person. On occasion, when I haven't eaten a lot during the day, I've ordered two pizzas just for myself. And I'm a regular sized Dutch guy, so not one of those stereotypical Americans that can win eating contests.
- ryanmercer 8y agoHead over to LinkedIN and search 'tesla recruiter'. I stopped counting current employees at 100. Whey the hell does a company need 100 or more recruiters...
- tempaccnt123 8y agoI'm sure this is at least partly tied-in to their ongoing, illegal efforts to crush labor organizing at their plants. https://www.reuters.com/article/us-tesla-nlrb/worker-testifies-that-tesla-stopped-him-from-organizing-union-idUSKBN1J803Z https://www.reuters.com/article/us-tesla-nlrb/worker-testifi...
- icelancer 8y ago>> illegal efforts Yet to be determined by a court. Precision in language is important, no matter how heated you are about a situation.
- Someone1234 8y agoTrue. Let's go with "immoral efforts." I think that's precise enough language.
- deleted 8y ago[deleted]
- paulcole 8y agoStomach churning? Un-American?
- organsnyder 8y agoAll too American, I'm afraid.
- vkou 8y agoUnion busting is as all-American as Wal-Mart.
- SEJeff 8y agoDon't feed the trolls. He's a new account perhaps a UAW shill.
- 8y ago
- ttul 8y agoA 9% adjustment isn’t bad against a business that is running as hot as Tesla...
- jonknee 8y agoAre they running hot? They're in serious financial trouble and have been unable to meet self-imposed production levels. Now they're laying off thousands of people.
- nickik 8y agoThey are not in financial trouble. Most people are only skeptical if they can do it without raising capital. However everybody agrees that they both have many costumers waiting and would be able to raise capital. Nobody believes that Tesla is in real real serious troupe.
- jonknee 8y agoSpending tons more than you make and not having savings is traditionally called financial trouble. Even after a recent huge rally their most recently issued bonds are yielding 7% which means lots of real people think they are a risk. Lots of customers is good, but the more cars they have made the more money they have lost. Negative operating leverage is really bad for any company, but especially one as cash intensive as manufacturing vehicles. I'm rooting for them, but Tesla is indeed in serious financial trouble. Just ask Elon who fired 3,500 people so he could make the books look nicer.
- JumpCrisscross 8y ago> They are not in financial trouble. Most people are only skeptical if they can do it without raising capital. I agree, they are not in financial trouble. Being dependent on a near-term capital raise, however, is financially perilous. Lots of companies were waiting for the fall fundraising season when Lehman went bankrupt.
- hndamien 8y ago
- mlthoughts2018 8y agoFriendly PSA: always negotiate severance. Companies can always be forced to restructure like this or even just choose to on a whim. Pressure from the board, hiring a new CTO who wants to bring in his or her own people, etc. etc. Always make sure you are happy with what type of offsetting compensation you’ll receive in this eventuality before taking the job, and consider it a huge timesaver if an employer passes on you because you asked to negotiate a competitive severance package.
- organsnyder 8y agoEasy to say for those of us with highly-demanded skillsets. My hunch is that a large portion of that 9% didn't have that luxury.
- mlthoughts2018 8y agoI understand it’s not always possible, but your response (which seems to always be the gist of the first response when I make a comment like this) is usually overstated. You don’t have to have some crazy special skillset or seniority. You just have to politely say no to any prospective employer who won’t offer it and keep searching. Yes, of course negotiating power is limited if you’re in dire straits & must take any job. Definitely sucks and I wish we offered better protection to candidates in that situation. But many people just don’t even think to ask, even when they already have a job they are OK to stick with if they need to turn down a different offer.
- craig1f 8y agoLooks like the 9% were mostly management in redundant roles, not production. 100% of the articles I have read about Tesla have been completely fabricated hit-pieces, or like this one, completely misleading. I think that at this point, they deserve the benefit of the doubt unless you're willing to actually read the article.
- Spooky23 8y agoHow is it misleading? They purged contractors not long ago and are now laying off lots of people. Those are facts. They reported that "production associates" are unaffected by the layoffs -- which doesn't mean that people working in production aren't impacted. It just means that they aren't laying off hourly employees in production. The editorial at the bottom of the article rationalizes the decision and reflects that it is ultimately good for the company. IMO, it was a pretty balanced article that delivered potentially bad news in a fair way.
- stephengillie 8y ago> It means that Tesla could let go over 3,000 employees in this round of layoffs. > The CEO also confirmed that Tesla didn’t renew its contract with Home Depot to sell its energy products at their stores. Tesla energy advisors were supposed to be at 800 Home Depots across the US earlier this year. If they had 3.5 employees per store, and a team of 200 managing the entire effort, these layoffs could be attributed entirely to the lost Home Depot deal.
- jonknee 8y agoIf that was the case they definitely would have noted it. Musk said "In addition to this company-wide restructuring, we've decided not to renew". He then went on to say the majority will be given the opportunity to move to other Tesla retail locations. It reads more like the cuts don't include the Home Depot related staff (who surely work hourly + comission anyway, these are cuts to salaries positions).
- toomuchtodo 8y agoAs a Tesla investor, I'm very curious what the conversion rate is of Home Depot/Big Box customers vs Tesla stores. My guess would be it's much higher in Tesla stores. No one likes being bothered at Home Depot by sales staff when they've just popped in for a part.
- StillBored 8y agoThe powerwall is next to the AC/insulation guy that seems like he is there about 50% of the time. He hooks people with "free home efficiency audits". I've seen a tesla rep there with lower frequency, but I'm having a hard time understanding how many they actually sell, because frankly where I live the only use case is going to be people with large enough solar installations to go off grid, as the power company doesn't do any kind of time based rate tiering (the tiering is entirely usage based, and the power company includes how much solar you consume in the equation).
- deleted 8y ago
- txsh 8y agoCould have saved these jobs by laying off the idiot CEO instead.
- bdcravens 8y agoHis CEO pay is $37k/year.
- stefan_ 8y agoWell, besides stock grants worth billions.
- kgwgk 8y agoSomewhat higher now ($50k). “Mr. Musk’s base salary reflects the current applicable minimum wage requirements under applicable California law, and he is subject to income taxes based on such base salary. Mr. Musk, however, has never accepted and currently does not accept his salary.” Of course he has also received equity compensation and will receive more in the future if Tesla somehow makes it. https://www.bloomberg.com/view/articles/2018-01-24/elon-musk-already-wanted-tesla-to-succeed https://www.bloomberg.com/view/articles/2018-01-24/elon-musk...
- txsh 8y agoI was referring to the recklessly poor decisions, not the salary.
- bdcravens 8y ago
- IBM 8y agoThis is definitely the move of a company in the process of scaling up production of their mass market vehicle that their valuation hinges on. Definitely not about managing cash flow.
- andruby 8y agoAre you missing a "/s"? Or do you mean that they are preparing for another round of funding and want to improve their valuation?
- martythemaniak 8y agoIt is the usual snark that dominates any discussion of Tesla. There's so much snark in these threads, it becomes hard to detect.
- stevievee 8y agoYea, I just abandoned the thread altogether at this point. Might even be Tesla shills - don't know
- dabockster 8y agoText-based speech has always had a hard time conveying emotion. No need to feel bad about not detecting sarcasm here, we're probably all oblivious to an extent.
- mtgx 8y agoMusk has already admitted in the email to the company that this was a cost-cutting decision: https://twitter.com/elonmusk/status/1006597562156003328 https://twitter.com/elonmusk/status/1006597562156003328 I also think that this move was mandated by the board when it recently voted for him to remain chairman (maybe not the firing per se, but that Tesla becomes profitable ASAP).
- usaphp 8y agoThe reply below in a feed from someone called Eleonmusk which I initially thought is Musk himself, offering bitcoins after registering in some scam event...lol
- tim_sw 8y ago"Given that Tesla has never made an annual profit in the almost 15 years since we have existed, profit is obviously not what motivates us."
- greglindahl 8y agoQuotes taken out of context are really powerful, aren't they?
- stevievee 8y agoTesla and SpaceX are businesses and I never understood the public fandom behind them and Elon Musk. 3,500+ people losing their jobs is pretty significant for a leader who touts altruism as one of his top motivators.
- jblow 8y agoYou are not going to count all the jobs he created in the first place, and the years of gainful employment those 3500 people had? It’s just all negative in your estimation?
- stevievee 8y agoWhat an oversimplification of my comment. I'll oversimplify it for you so you can't misinterpret it: "This decision he just made is poor and Elon is human just like everyone else"
- djrogers 8y ago> "This decision he just made is poor and Elon is human just like everyone else" How on earth could you possibly know that? It's entirely possible (likely) that not laying off those 3000 people would endanger the ability of Tesla to continue employing the other 30,000 people. Life (and business) is sometimes messy...
- danso 8y agoMusk tweeted out the layoff email he sent: https://twitter.com/elonmusk/status/1006597562156003328 https://twitter.com/elonmusk/status/1006597562156003328
- deleted 8y ago[deleted]
- swampthinker 8y agoWow, that fake crypto scheme tweet under his official tweet had me fooled for a second.
- foepys 8y agoThe fact that Twitter cannot put a single person up to delete a few dozen scam tweets every time a off celebrity tweets and ban a few accounts speaks volumes about how much they don't care about their users.
- ironjunkie 8y agoFully agree and that's something I really don't get. Why don't they pay a small team of 5-10 people that monitors the top 200 accounts, and check if replies like that happen. Hacky solution, but it would just work.
- paulddraper 8y ago(And FYI, Elon is #87 for followers https://friendorfollow.com/twitter/most-followers/ https://friendorfollow.com/twitter/most-followers/)
- Washuu 8y agoScroll too far down that chain and porn comes up too.
- draw_down 8y agoSorry to hear it, they seem to be having a lot of troubles lately.
- zer00eyz 8y agoI wonder if some of this is finalizing the digestion of solar city. How many accountants, tech, and office workers did the combine company have that were redundant? Have there been layoffs from the merger (if there were I missed them) - I'm curious to see if this is the end result of that combination.
- bduerst 8y agoThere were some pretty massive layoffs with the merger already, leading into it, at least according to someone I know who was part of those lay offs.
- apeace 8y agoAnd according to this article: > After the acquisition of SolarCity, Tesla had another round of layoffs to restructure and remove duplicate positions from the acquisition, which resulted in about 20% of SolarCity’s workforce being let go.
- zer00eyz 8y agoOther than the article I can't find anything that points to redundancy being the cause: https://www.theverge.com/2017/10/25/16545956/tesla-solarcity-layoff-firing-elon-musk https://www.theverge.com/2017/10/25/16545956/tesla-solarcity... Is the only other reference that I have found and articles around this time frame don't make it clear the redundancy was the cause.
- thedoops 8y agoThe classic solar sales and installation company business model isn't shaping up very well. Operating margins aren't the best due to the need for local assets in frequently changing markets as incentives come and go. It's definitely more profitable to sell batteries/panels/etc to the solar installers than to run the operation itself.
- gh12EEw 8y agoTesla is a ponzi scheme.
- akshayB 8y agoTesla's market cap is $55B If you do a quick math let's say they sold 400,000 Tesla (which they haven't yet) at an average of $100,000 each (which is probably lower) its net worth comes around $44B. I feel like company is way over valued and there is lot of fluff in the evaluation.
- tomp 8y agoThen short it.
- dragontamer 8y agoThat's not how people typically evaluate companies. The "standard" way to evaluate a company is to take the price of the stock, and divide by the profits. There are some details like "historical PE" vs "forward-looking PE", but that's the basic metric. The PE ratio represents the number of years it'd take for a company to make back the price you paid. And for most people, PE of 15 to 25 (15 years to 25 years of profits) to make back their market-cap is reasonable. Some companies like Amazon have PE-ratios over 100, as they're considered to be in "growth mode". Tesla never has made a profit however, so its PE ratio is negative, at least historically. So evaluations are most likely based on expectations of future profits. Assuming Tesla is "worth it" at $55 Billion market cap or so, then Tesla needs $2.2 billion of consistent PROFIT / year (not revenue) to get to ~25 PE ratio. Anyway, that's analysis from just one metric. There are other metrics out there, but I think PE ratio is the most common, and one of the simpler metrics to understand.
- qaq 8y agoif you can just invest based on simple metrics like that it would be very easy to make money in the market.
- dragontamer 8y agoI'm not saying "invest in simple metrics". I'm explaining how a typical evaluation is done. The original poster's evaluation is fundamentally nonsense. > If you do a quick math let's say they sold 400,000 Tesla (which they haven't yet) at an average of $100,000 each (which is probably lower) its net worth comes around $44B. This line just doesn't make sense at all. There's no metric I'm aware of that matches this methodology.
- philwelch 8y agoIn other words, Tesla is being approximately, literally decimated: https://en.wikipedia.org/wiki/Decimation_(Roman_army) https://en.wikipedia.org/wiki/Decimation_(Roman_army)
- jb320 8y agoI am waiting for my scheduled HR meeting along with several hundred other co workers in a few minutes. I am an outside, in-home residential solar salesperson hired by Tesla long after the Solar City aquisition. I have relied on the leads generated by the Home Depot employees. I am salaried and most likely going to get my walking papers today. It is apparent they don't see value in the proactive approach process to sales.
- aerovistae 8y agoSorry to hear that, man. You going to be alright?
- godelmachine 8y agoLet us know what happened
- riantogo 8y agoSomewhere along the way I have come to appreciate that as a society we need to optimize better for psychological, financial and physical wellbeing of people prioritized by proximity: employees, community, humanity. It will definitely slow down innovation. We might go to Mars 20yrs late, no self driving cars for 10 more yrs, walk around the city some more before electric scooter land etc. Of course it is in conflict with innovations in humanity impacting products like cure for cancer, malaria etc. It would be nice to figure out a solution that provides a good balance.
- jdross 8y agoHave you considered moving to Europe?
- dsfyu404ed 8y agoThis. Even if you don't cross an ocean you can still vote with your feet. You get the benefit of living somewhere with agreeable politics and the group you left gets the benefit of being "rid" of you. Everyone is happier that way. Of course people just need to have their cake and eat it too which causes problems. Sure, moving is a pain in the butt for a laundry list of reason but you have to ask yourself is it less of a pain in the butt than living somewhere where most people hold mostly incompatible beliefs from your own and what your priorities are.
- deleted 8y ago[deleted]
- riantogo 8y agoRight. But I'm thinking if there is a way to solve this systemically (including US).
- ManFromUranus 8y ago>It will definitely slow down innovation It will definitely slow down innovation. Some projects / aspirations will come off the table completely. Mars? Forget about it. All your mars money will be treating AIDS/Malaria/Cancer/Whatever. All NASA and space exploration money will go to feeding poor people and refugees and all manner of charitable causes, these causes will only ever multiply ad infinitum. I think there is really only money for one or the other. You can have a comfy easy welfare state life, or you can explore and reach for the stars. You can't do discount Mars, or space exploration on the cheap, you basically can't have both. Your welfare state will make it so that you don't ever really have enough money to actually do any kind of space exploration. Sure you can send cheap drones locally within the solar system, but that's all space exploration will ever be from now on.
- danso 8y agoThat Home Depot/Powerwall partnership was just announced in February 2018: https://www.theverge.com/2018/2/2/16964154/tesla-home-depot-stores-solarcity-powerwall-solar-panel-roof https://www.theverge.com/2018/2/2/16964154/tesla-home-depot-... Were home installations ever projected to be a growable part of the company?
- greglindahl 8y agoAt the start, industrial installations of Power Pack were expected to be 80% of the battery business, but an alarming number of people outside of Tesla appeared convinced that retail Power Wall would be the thing. Guess what?
- dalbasal 8y agoJust reading the first few comments.... I really don't get the Tesla hate. Is it hacker-ish contrarianism? Have they done something? What's the deal HN, why are we cheering against the home team? Overall Musk has been pretty straightforward and explicit with what he's doing. Tesla (and spacex) set extremely ambitious goals, like none of their competitors do. They take big risks. They're not interested in reducing risk. They're interested in a business plan that leads to a mass migration of icbs to electric (or humans to mars). The nature of ambitious goals is that sometimes you don't hit your marks. The nature of risk taking is that you might fail, and have to do fast paced adjustments to recover. Riskiness also means (literally) that Tesla comes with some chance of total failure. If they lose two or three big bets in a row, it could be game over. There are no cash cows or guaranteed income streams. Tesla is not Toyota or Microsoft. If you own Tesla, you need to be ok with that risk. Don't like it? Perfectly reasonable. Sell. Personally (not an investor or customer), I think these companies are awesome. If GM disappeared tomorrow, nothing that I care about changes. If Tesla disappears, this could set back electric cars by 5yrs. If McDonald Douglass rocketry disappears, someone else will launch rockets for the US military. SpaceX... that hurts our chances of landing people on the other worlds anytime soon. None of this risk profile stuff would even be controversial if Tesla was a fund. A fund manager can be as risky as she likes, provided that's the stated investment goal. Why doesn't Elon get this amount of rope? .. at least on hacker news? Seriously, what has he done to deserve this negativity?
- pstuart 8y agoMany here likely feel that they've been subjected to too much hype.
- _Codemonkeyism 8y agoAgain?
- myrandomcomment 8y agoStill waiting for my site visit for the $1000 I put down a very long time ago for my solar roof.
- boznz 8y agoThey should also sack the execs who made the shitty decision to hire these guys, being approached by salesmen ruins any shopping experience IMHO and the whole debacle has probably lowered Tesla's image even more in the eyes of most people.
- carlivar 8y agoThat exec was probably the SolarCity CEO at the time, who is Elon Musk's cousin, so that might be a little awkward.
- hi41 8y agoWhy is Tesla doing this? It is riding high on the success of its electric cars and Elon Musk is so famous and is considered a visionary.