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Company Update
- johannes1234321 8y agoKey point is towards the end: "As a result of the above, we unfortunately have no choice but to reduce full-time employee headcount by approximately 7%"
- negus 8y agoIf you are experienced with media messages enough, you always start reading such messages from the end. I most cases introduction is totally meaningless and is used to make the message polite.
- tapland 8y agoKnew from the start that there were some cuts coming, but then it was really hopeful until the 7% figure dropped. I wish people laid off good luck.
- bnt 8y agoFirst 10% of SpaceX, and now 7% of Tesla. Wonder how much of those 7% are SolarCity folks.
- radiusvector 8y agoHopefully a lot? The SolarCity acquisition seemed shoddy to begin with.
- andrewmcwatters 8y agoI don't know how SolarCity makes any money. The last time I looked into purchasing panels from them, it was 20 years to break even on your purchase. What a joke.
- talltimtom 8y agoWhere’s the joke in that? You buy the installation on a 30 year fixed loan and reducere your power Bill tomorrow. To compare, what is the “break even” point of buying a property and renting it out?
- lukeqsee 8y agoI was an early investor in Tesla (I cashed out a few years ago). I believe in their mission. I wish their success. But this is hard, simultaneously telling your workforce: 1) We need to you work harder, better, and faster. 2) To help you achieve this, we will be reducing your headcount (and thus resources) by 7%. 3) By the way, if you fail, the company fails. …But keep your heads up, it's for the planet! At some point these thousands of folks that remain are going to start asking "Is it worth it?" That coupled with legitimate competition from their "entrenched" competitors, 2019 looks to be a very difficult year for Tesla. I still hope they succeed; I just hope the real, human costs are worth it.
- Beltiras 8y agoFor such a harsh reality the message was well delivered.
- mrpopo 8y agoI don't believe Tesla will do any good for the planet overall. The only way we can do good is if we sell less individual cars, not more, whether electric or not. Nowhere in Tesla's vision can I see a plan for more electric buses and trains. The USA desperately need a viable train network for the 21st century.
- purple_ducks 8y agoIt sure seems like Tesla is the foremost reason car manufacturers have started to fully acknowledge electric is the near(& medium/long term)-future and not just some check box/compliance car to satisfy "well meaning bureaucrats". Existing European/Japanese/US car manufacturers were happy enough to trundle along with existing ICE cars as it required less effort & gave better profits. They & Chinese (electric) car/bus makers are the reason our planet is going to improve - ~0 air pollution in populated areas and massive reduction in nuisance engine noises.
- radiorental 8y agoThe most popular selling electric car is a Nissan leaf, has been on the market for 8 years, and it costs half of a model 3 (ignoring specs)
- mgw 8y agoThese cuts seem much more like an unplanned event and an indication of things not going according to plan than the cuts in the middle of last year. Those seemed like a good way to readjust to the realities of high volume production and get rid of redundancies. I wonder in which areas of production they've experienced slower progress than what they'd anticipated last year.
- brianwawok 8y agoCutting the worst 7% of your workforce isn’t a terrible outcome. With that much hiring you are bound to find some employees that aren’t as good as others.
- lultimouomo 8y agoWhen you announce you're doing significant cuts and that you hope, maybe, to get a tiny profit for next quarter, and then after that things will be even worse, I think you're also going to lose some of the best of you workforce, as they'll start looking around.
- brianwawok 8y agoDepends if they believe in the mission or not. I feel a lot of people that are Tesla people think they are changing the world. They aren't quitting cuz profit margin is "low". They could have already worked for Bank of America doing boring backoff programming if they wanted a stable and profitable job.
- dx034 8y agoHowever, identifying the worst 7% is the real task.
- quest88 8y agoGotta explain low numbers in earnings call somehow /s.
- ReptileMan 8y agoWe will have a lot more work in 2019 so we must downsize our workforce definitely rings counterintuitive to me.
- minikites 8y agoNot if the company is as poorly run as Tesla.
- deleted 8y ago[deleted]
- grecy 8y agoIt's not 1919 anymore. Moving forward there will be a lot more work done with a lot less people. Get used to it.
- refurb 8y agoIt’s because the financial pressure is increasing. High margin car demand is going to come down. Tesla made a small profit on those. Now comes the low margin cars. If Tesla wants to be profitable on those, costs will need to be cut.
- nopriorarrests 8y agoStock is -8.15% on pre-market trading. Normally layoffs are viewed as positive or neutral event, but this paragraph -- " In Q4, preliminary, unaudited results indicate that we again made a GAAP profit, but less than Q3. This quarter, as with Q3, shipment of higher priced Model 3 variants (this time to Europe and Asia) will hopefully allow us, with great difficulty, effort and some luck, to target a tiny profit" does not instill much confidence, I guess.
- kgwgk 8y agoLayoffs are viewed as positive for companies with a declining business (or at least on the bad part of the cycle). But when the company is growing and the stock is close to the all time high they are not so understandable.
- aboutruby 8y agoNot sure where you found that figure, I see 0.36% up and no major change in the past 10 days.
- sharmi 8y agoIt is not much of a problem if Q4 is better than Q4 of the previous year. That is actually a more meaningful comparison than Q3 to Q4, each quarter will be affected by different issues (end of financial year, college opening, winter, summer etc) whereas across years, the influences on each quarter are similar.
- 7e 8y ago
- notananthem 8y agoThey're not profitable. With different leadership tesla itself could be maybe. What a shitshow though
- yoavm 8y agoReading this I ask myself why does one chooses to work in such a work environment? Are people working there doing it because they feel they're part of a bigger dream? Seems to me like it's very hard to feel this way when you're so replaceable. At the end of the day I guess the work is similar to working in many other car brands, just harder, more hectic and managed more poorly. Are there any special benefits that I'm missing? (I'm really wondering, not trying to put anyone down)
- beaconstudios 8y agoI would be drawn by a combination of the challenge of high expectations, and the fact that the company works towards a meaningful cause. Of course, there's a huge difference between the challenge being innovating all the time and straining your cognitive and physical abilities, and the challenge of trying to keep your partner and have some semblance of a personal life despite working 12 hours a day, 7 days a week. It seems like Tesla PR implies the former, but the reality is the latter. If reports are to be believed, the company structure and management is still very much a Taylorian command-and-control hierarchy which is a huge barrier to real innovation.
- montenegrohugo 8y agoI think fulfillment is a big part of it. Knowing that your work actually means something, that you're not just making people click more of your companies manipulating & intrusive ads and that you're not just implementing a done ad nauseam CRUD app or whatever, but instead contributing to something new & potentially revolutionizing can be a big incentive.
- redwood 8y agoThis note honestly made me consider looking at their job board! Folks want to be part of a mission they can really get behind.
- ericb 8y agoI don't work at Tesla. Here is why I would: I'm on team humanity. In spite all our failings, I want humanity to succeed and reach for the stars. Success means having a livable planet. For idealists like me who are also realists, the only way to get everyone working toward this future is to put it in their self-interest. Anything else just. won't. work. To dedicate yourself in a practical way to the future of humanity, Tesla's one of the few games around.
- andy_ppp 8y agoWhat I don't understand is why Tesla has to do this - wouldn't it be better just to run at a loss for a few more years like most other tech companies do, deliver a better high tech car for a while and then start to reduce cost once self driving comes in? I mean the whole premise of Uber existing is based on this idea and I see Tesla as being potentially even more profitable (and more likely to have working self driving vehicles)...
- ReptileMan 8y agoYou are run at a loss pretty easy in software company - your operational costs are negligible and payroll manageable and you have low capital expenditures. With a physical product and factories - not so easy.
- sokoloff 8y agoOnly if people will continue to lend you large sums of cash required. Run out of cash and it’s off to bankruptcy court. There’s good evidence that Tesla was weeks away from this outcome in the fall and IIRC they have a large loan payment due this spring. If they can’t meet it (from operating cash flows or further borrowing), they can’t keep operating. There, they are risking ownership and control of the whole company rather than the jobs of 1/14th of the company. Minor point, but since you included it: I wager: full self-driving is still a decade or more away.
- sortoftechguy 8y ago>There’s good evidence that Tesla was weeks away from this outcome in the fall and IIRC they have a large loan payment due this spring. Good evidence? Elon himself said it. And yet outsiders denied it then, and are still denying it. This company is in a cash-crunch.
- sokoloff 8y agoI agree that Elon said it. His credibility is not the highest, and I phrased it that way because there was additional outside correlated data and not just “because Elon said it”.
- kypro 8y agoWhile I know I could never make someone redundant personally, I do think the idea that you're owed a job at a company forever is wrong. As someone on the spectrum, it's not always been easy for me to find work, and I have been made redundant in a similar manner to this in the past which wasn't an enjoyable experience. Still, at the time all I could do was express my appreciation that for a few years that company wanted my services enough to pay me a decent wage and that I thoroughly enjoyed my time working for said company. I understood my job was a risk to the company going forward and I held no hard feelings about the decision made to let me go. In a perfect world things like this wouldn't happen. Top employees would never leave for a better paying job, and you'd never have to let employees go to remain competitive. But this isn't a perfect world. We must prepare for the worst and hope for best while remembering to treat each other with as much respect, kindness, and understanding as possible. Whether or not these specific cuts were needed or sensible, I don't know. What I do know is that Tesla is a young company in a highly competitive space. Were I personally to take a job at Tesla I wouldn't expect to be there longer than a year - especially if I was a temp worker or contractor. Anyone who's worked at small, early stage startup in the past would know how this story goes. You often work harder and longer than you would at a more established slower moving company, you don't get the perks, and you're constantly worrying about whether or not you'll have a job next month. But it can also be very rewarding when things go well. These are the decisions you must weigh up as an employee when looking for work.
- rocqua 8y ago> I do think the idea that you're owed a job at a company forever is wrong. Forever, sure that is wrong. However, there is some expectation of constancy. Simply because people tend to make choices based on the status quo. What makes things worse is that signaling that lay-offs are coming, either for specific people or in general, really harms productivity. This is because people start infighting and lose morale. Hence, companies have reasons to announce these things late. This means it becomes harder to trust statements by employers about job security. When firing happens, this distrust is amplified.
- ThePhysicist 8y agoI think for a company the size of Tesla it would actually be beneficial to have a well-organized worker council and union through which the employees could negotiate with the board of directors when things like this happen. Often this results in a better solution for everyone. When the recession hit Germany in 2008 most large automotive companies were also faced with a massive decline in orders and were forced to aggressively cut costs. As employees in these companies are heavily unionized they of course protested against this and the worker council started negotiating with the board of directors. They found a solution by reducing the work hours for a large percentage of their workers (with an accompanied pay cut) instead of firing a smaller percentage of them, which allowed them to retain almost everyone and at the same time reduce costs. When the economy sped up again they were able to just increase the working hours again. This was great for the employees (as they didn't lose their jobs) but also for the companies, because they didn't have to find and train new employees after the crisis was over. I'm wondering why Tesla isn't considering something like this as I imagine there's a lot of training involved in many jobs at their factory, and it's probably very costly to rehire and retrain new employees when the growth picks up again. Just my 2 cents.
- empath75 8y agoRemember things like this when you’re thinking of leaving your job for greener pastures and want to stay out of a sense of loyalty. Your company is not loyal to you and that we drop you the second you’re no longer useful to them.
- OJFord 8y ago> Your company is not loyal to you and that we drop you the second you’re no longer useful to them. Of course it will. Why would/should/could it do any differently?
- paganel 8y agoBecause most of those companies ask you for things in return that only a loyal person would do, like "work overtime with little or no OT pay" and stuff like that.
- kgilpin 8y agoThere are ways to cut costs without layoffs and some companies choose to go that route. I think the point you are trying to make is that your employer will need to do what’s necessary to remain solvent. But that doesn’t automatically mean layoffs. For example: “We have a very skilled and competent work force and the last thing we want to do is lose them when we’re assuming this economy is going to come back,” said Craig Reider https://www.nytimes.com/2008/12/22/business/22layoffs.html https://www.nytimes.com/2008/12/22/business/22layoffs.html
- mikro2nd 8y agoBecause the inverse seldom seems to be true. Employees are usually expected to be loyal to the corporate cause (or at least give some appearance of loyalty). During one assessment many years ago I was accused of not being sufficiently "loyal", and I (ah, youth!) responded, "You want loyalty? Get a dog." Needless to say it didn't go well for a little while until a higher-up manager squashed the whole thing because he agreed with my point of view.
- 8y ago
- mathattack 8y agoThe lay-off is small in context. It’s less than a quarter of their prior year headcount growth, and much lower than what Detroit Auto has experienced. Auto companies routinely let broad swaths of employees go. Big doesn’t mean safe. It still is terrible for people who have everything to Tesla over then past few years. At least they are leaving for a hot job market.
- justin66 8y ago> At least they are leaving for a hot job market. Auto workers in Northern California?
- mathattack 8y agoLots of autonomous startups, and auto divisions in larger tech companies. Most mainstream auto companies have a presence here.
- sortoftechguy 8y ago>Auto companies routinely let broad swaths of employees go This is the second round of layoffs in less than a year. Growing companies with infinite demand don't need to lay people off.
- 11thEarlOfMar 8y agoThe interesting tradeoff seems to be investments in future models & infrastructure vs. expense of current workforce. Tesla is investing in developing 4 new models, production capacity for model Y, building 2 more gigafactories, building 1,000s of superchargers globally, building capacity for solar roof production, and I don't know where they are with powerwall. Once to 10k is out, we can size it up, but my guess is that all that capital spend is greater than the cost of employing the 7%. Would be interesting to see the math that went behind the decision.
- sortoftechguy 8y ago>Tesla is investing in developing 4 new models, production capacity for model Y, building 2 more gigafactories, building 1,000s of superchargers globally, building capacity for solar roof production Tesla claims to be doing all this, but the financials say different. Their CapEx has not increased in many quarters (it actually decreased at one point recently). So can you explain to us how you think they are doing all this? Where does the money come from?
- cjhopman 8y agoExactly. I'm really worried about the service and supercharging infrastructure. In the last year (to q3-18, q4 stats aren't out), we've gone from one service center per ~800 cars to one service center ~1200 cars. We've gone from a supercharger per ~30 cars, to a supercharger per ~40 cars.
- draw_down 8y agoThey seem to encounter problem after problem these days. It’s a real shame to see.
- leavjenn 8y agoTesla starts building Gigafactory in China, expects to begin production in the second half in 2019. Also they start for hiring locals[1]. Is this related? [1]https://www.cnbc.com/2018/12/06/teslas-china-factory-set-to-begin-production-late-next-year.html https://www.cnbc.com/2018/12/06/teslas-china-factory-set-to-...
- sortoftechguy 8y ago>Tesla starts building Gigafactory in China Tesla didn't start to build anything. The Chinese government put them on notice because there was no work done. So, of course, Elon flies by himself to China to put on a grand opening show and says they'll start production in a year. How is it this community, who prides itself on being so smart, can fall for this? No car factory has ever been built that fast. How can it be in production in less than a year? Where is the money coming from? After the disastrous Model 3 launch, are there still people on the planet that think Musk knows more than the incumbents about building a factory? Remember 3D assembly lines and robots so fast you'll need a strobe light to see them? It's astonishing that people are still buying into this story.
- tome 8y agoWhy would you grow staff by 30% just to fire 7% of people next year?
- Strom 8y agoTo meet short-term growth goals via human work. Everyone had a close eye on the number of cars produced. Now they're improving their efficiency and thus fewer people can achieve the same numbers.
- justin66 8y agoPoor planning which necessitated pulling back a lot of planned automation, followed by gradually making the whole operation more efficient. (as well as lack of a union, willingness to put employees through the overtime wringer, etc.)
- rb808 8y agoRank and Yank. Hire lots of people and get rid of the people that aren't performing. Its great when you're a high performing company that everyone wants to work for, doesn't work if you aren't doing well and people have an extra reason to avoid you (see GE, GS right now)
- deleted 8y ago[deleted]
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