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Tesla fires hundreds after company-wide performance reviews


jpd80

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http://www.mercurynews.com/2017/10/13/4819750/

 

PALO ALTO – Tesla fired hundreds of workers this week, including engineers, managers and factory workers,

even as the company struggles to expand its manufacturing and product line.

The dismissals come at a crucial point for the company, which is pushing to increase vehicle production five-fold

and reach a broader market with its new Model 3 sedan. The electric vehicle maker missed targets for producing

the lower-cost sedan, manufacturing only 260 last quarter despite a wait list of more than 450,000 customers.

The company said this week’s dismissals were the result of a company-wide annual review, and insisted they

were not layoffs. Some workers received promotions and bonuses, and the company expects to hire for the

“vast majority” of new vacancies, a spokesman said.

“As with any company, especially one of over 33,000 employees, performance reviews also occasionally result

in employee departures,” a spokesman said. “Tesla is continuing to grow and hire new employees around the world.”

In multiple interviews, former and current employees told this news organization little or no warning preceded

the dismissals. The workers interviewed include trained engineers working on vehicle design and production,

a supervisor and factory employees.

Workers estimated between 400 and 700 employees have been fired. Tesla refused to say how many employees

were let go, although the company expects employee turnover to be similar to last year’s attrition.

The spokesman said most of the dismissals were administrative and sales positions, and outside of manufacturing.

Tesla employs about 10,000 workers at its Fremont factory.

Workers spoke on the condition of anonymity because they feared reprisals from the company. Employees said

the firings have lowered morale through many departments. Several said Model X, Model S and former SolarCity

operations seemed to be targeted.

Juan Maldonado, a production worker, felt the tap on his shoulder on Thursday. He worked at Tesla for nearly

four years, and said he heard about 60 other workers in his section of the factory were dismissed.

Maldonado, 48, said he ran late for work twice in recent months, but thought he had straightened things out

with his supervisor. Now, he said, “I’m going to try to find a job.”

CEO Elon Musk said factory output will increase production to a half-million electric vehicles in 2018.

The company expects to deliver about 100,000 vehicles this year.

Musk has told investors the company is focused on Model 3 production and expects to eventually build

10,000 cars a week. The manufacturing will become highly automated, but Musk told investors during

the early ramp up he expected high overtime costs.

He also joked to employees they would be going through “production hell” to meet demand for the new car.

The company said recently a manufacturing bottleneck caused it to fall far short of its goal to produce

1,500 Model 3s in the quarter.

The company has also started to cut some former SolarCity operations, which were acquired by Tesla

last year. In August, Tesla told state regulators it would layoff 63 workers in Roseville, including sales

and administrative staff. Tesla lost $336 million in the second quarter.

This week’s dismissals have not been reported to the state Employment Development Department,a

spokeswoman said. The state generally requires companies to report layoffs of more than 50 employees

in a 30-day period.

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.

The clean energy company — maker of luxury electric vehicles, battery storage and solar roofs —

has failed to post an annual profit even as its stock has soared on promises of revolutionary products.

About 450,000 customers have placed $1,000 deposits for the Model 3.

Tesla has faced ongoing discontent from some factory workers, who have complained about work

conditions and wages below the auto industry average.

Tesla has a hearing before the National Labor Relations Board in November for charges that company

supervisors and security guards harassed workers distributing union literature. Tesla denied the accusations.

Openly pro-union workers were among those fired this week. Some believe they were targeted.

The company denied union activities played a role in the dismissals.

Michael Harley, managing editor at Kelley Blue Book and Autotrader, thought the dismissals could

be an effort to improve vehicle production.

“It’s no secret that Tesla’s Model 3 development and ramp-up for production has been derailed,”

Harley said. “A major change in staff – whether dismissal or layoff – is an indication that there is

an upper level movement to put the train back on the tracks.”

Edited by jpd80
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Get back on track? By reducing your workforce by 100 people, things are going to go faster? It's going to take time to hire and train new people. So it'll be months before they are even close to "back on track".

 

My big question is why did they let things get this bad before taking action? Who was asleep at the wheel? Tesla has a lot of growing pains to go through before they can even come close to matching the output of any of the top 5 auto makers.

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Just a guess here but maybe it wasn’t as apparent how bad they were until they tried to ramp up model 3 production.

So when the pressure was on to perform , some of the staff didn't perform as management expected?

Yeah that happens in a lot of work places but I bet it was accentuated by Tesla's unreal expectations.

 

Anyone care to speculate whether Tesla will now have a much higher turnover rate of staff

Edited by jpd80
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Anyone care to speculate whether Tesla will now have a much higher turnover rate of staff

 

The recent firings of poor performers combined with increased pay and other rewards for high performers should lower the turnover rate. The poor performers may also not have been a good fit for Tesla's culture. Keeping them on the payroll would be toxic for Tesla.

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The recent firings of poor performers combined with increased pay and other rewards for high performers should lower the turnover rate. The poor performers may also not have been a good fit for Tesla's culture. Keeping them on the payroll would be toxic for Tesla.

 

In other words, Tesla can do no wrong, while Ford does everything wrong....got it!

 

I'm not saying what Tesla said/did is wrong - it very well may have been the case where they had many under-performing employees that was revealed with Model 3 ramp-up, but I just find it amusing how most of your Ford posts are negative, while you're bending over backwards to paint Tesla's moves in a positive manner.

Edited by rmc523
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+1^ Were the marginally performing employees told in their annual performance reviews last year that unless performance improves they were subject to termination? A wholesale firing of employees sure sounds like lawsuit waiting to happen. And it's a heck of a message to send to remaining staff. And talk about a morale buster. Tesla management surely put them on an improvement plan and let them work towards acceptable quality standards before determining they weren't improving and were possibly going to be terminated. I mean, its VERY DIFFICULT to terminate marginally performing employees at a large company these days, especially one that is unionized. There has to be some type of program to address issues before termination. Is Tesla unionized? Does anyone know?

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In other words, Tesla can do no wrong, while Ford does everything wrong....got it!

 

No sir. Like any other business, Tesla and Ford have both done wrong things and right things. I think Ford uses a similar grading system for employee appraisals. People who get A grades get bonuses, people with C grades face the possibility of dismissal.

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Is Tesla unionized?

 

No sir. Tesla's workforce is not unionized. Labor unions would not fit with Tesla's culture. Elon Musk said the following.

 

 

 

"It is my firm belief that the separation of the workplace into “executives” and “employees” does not create a good working environment. We want to create a system of equality without artificial barriers so that someone can start as a trainee and one day lead the entire company. This is why we eliminate all the special privileges of the executives. For example, everyone will have equal access to parking, eating the same tables, and there will be no management offices. I am convinced that managers should work at the forefront, in the same work environment as the entire team. Even though I run the company myself, I still do not have my own office and often moved my workplace to the most challenging area in the factory and slept on the factory floor when there was a real crisis. Managers should always take care of their team before they take care of themselves – the supervisor is there to serve his team – not the other way round."
Edited by rperez817
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Ok cut it out with this "culture" crap. It's just corporate buzz speak that doesn't really mean anything.

 

Sure it does. It has to do with the management style. It doesn't have to be company wide - it could be in one organization or team.

 

Some orgs teach you to be empowered and management supports, encourages and rewards it. Others don't want you to be empowered and expect upper mgt to make all decisions and for you to do what you're told and not to raise issues. Those are completely different cultures and a completely different work experience.

 

I had one VP who demanded that people raise issues as soon as they're known and to escalate any issue that you thought wasn't being handled properly. If you did that you were rewarded. If you didn't do that you were reprimanded. One time I had an issue with something another team was doing and said we need to escalate immediately. The team leader said no let's wait. I escalated anyway. I was commended. The team leader got his butt chewed out for wanting to wait.

 

Other orgs were just the opposite - they didn't want to hear any bad news. Keep it to yourself. Don't care about the overall business - only what affects my group directly. Completely different culture.

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Another article on it:

 

http://www.mercurynews.com/2017/10/13/4819750/

 

 

 

In multiple interviews, former and current employees told this news organization little or no warning preceded the dismissals. The workers interviewed include trained engineers working on vehicle design and production, a supervisor and factory employees.

Workers estimated between 400 and 700 employees have been fired. Tesla refused to say how many employees were let go, although the company expects employee turnover to be similar to last year’s attrition.

The spokesman said most of the dismissals were administrative and sales positions, and outside of manufacturing. Tesla employs about 10,000 workers at its Fremont factory.

Workers spoke on the condition of anonymity because they feared reprisals from the company. Employees said the firings have lowered morale through many departments. Several said Model X, Model S and former SolarCity operations seemed to be targeted.

...

This week’s dismissals have not been reported to the state Employment Development Department, a spokeswoman said. The state generally requires companies to report layoffs of more than 50 employees in a 30-day period.

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.

The clean energy company — maker of luxury electric vehicles, battery storage and solar roofs — has failed to post an annual profit even as its stock has soared on promises of revolutionary products. About 450,000 customers have placed $1,000 deposits for the Model 3.

Tesla has faced ongoing discontent from some factory workers, who have complained about work conditions and wages below the auto industry average.

Tesla has a hearing before the National Labor Relations Board in November for charges that company supervisors and security guards harassed workers distributing union literature. Tesla denied the accusations.

Openly pro-union workers were among those fired this week. Some believe they were targeted.

The company denied union activities played a role in the dismissals.

Edited by rmc523
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Sure it does. It has to do with the management style. It doesn't have to be company wide - it could be in one organization or team.

 

Some orgs teach you to be empowered and management supports, encourages and rewards it. Others don't want you to be empowered and expect upper mgt to make all decisions and for you to do what you're told and not to raise issues. Those are completely different cultures and a completely different work experience.

 

I had one VP who demanded that people raise issues as soon as they're known and to escalate any issue that you thought wasn't being handled properly. If you did that you were rewarded. If you didn't do that you were reprimanded. One time I had an issue with something another team was doing and said we need to escalate immediately. The team leader said no let's wait. I escalated anyway. I was commended. The team leader got his butt chewed out for wanting to wait.

 

Other orgs were just the opposite - they didn't want to hear any bad news. Keep it to yourself. Don't care about the overall business - only what affects my group directly. Completely different culture.

I agree with this. I worked for the same company for 37 years and the group I worked the last 15 in, this happened regularly. My group was often punished more and rewarded less than the other and everyone pointed out there was an imaginary line you crossed in the building where the culture changed. My boss was the type to hide things and would tell us if we brought things higher, we were only hurting ourselves.

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Yes. Terminating employees due to cost cutting is probably the issue. They probably will get some type of severance package depending upon years of service, seniority, etc. That is a MUCH more viable way for management to shed labor costs than do performance based terminations. Even if the packages cost more in the short term.

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Yes. Terminating employees due to cost cutting is probably the issue. They probably will get some type of severance package depending upon years of service, seniority, etc. That is a MUCH more viable way for management to shed labor costs than do performance based terminations. Even if the packages cost more in the short term.

 

If they're not calling it a layoff they don't have to offer severance packages and they don't have to report it as such. This is Musk skirting regulations again.

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If they're not calling it a layoff they don't have to offer severance packages and they don't have to report it as such. This is Musk skirting regulations again.

Funny how a performance review times right at the time Tesla needs its workers to work as a team

and not be divied by "performance issues" and yeah, it's a sneaky way to save money and cut costs..

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  • 2 weeks later...

Well, the UAW's getting in on it.

 

"We're going to fire hundreds of people all at once 'with cause', so we don't have to offer severance, and so they don't qualify for unemployment, but trust us, we're a wonderful wonderful wonderful company doing wonderful wonderful things for everyone and never ever trying to screw people over because Elon Musk is a genius and a fantastic human being who would never ever do anything shady and who always tells the truth and if he says that these hundreds of people all had to be let go all at once because they all failed their performance reviews all at once, then he is absolutely telling the truth and not disguising layoffs as terminations with cause in order to save himself a lot of money and keep his rickety ponzi scheme disguised as a car company in business."

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Well, the UAW's getting in on it.

 

"We're going to fire hundreds of people all at once 'with cause', so we don't have to offer severance, and so they don't qualify for unemployment, but trust us, we're a wonderful wonderful wonderful company doing wonderful wonderful things for everyone and never ever trying to screw people over because Elon Musk is a genius and a fantastic human being who would never ever do anything shady and who always tells the truth and if he says that these hundreds of people all had to be let go all at once because they all failed their performance reviews all at once, then he is absolutely telling the truth and not disguising layoffs as terminations with cause in order to save himself a lot of money and keep his rickety ponzi scheme disguised as a car company in business."

Im surprised it took this long.
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On top of slower than expected ramp up of Tesla 3 production, this will play badly to anyone investing in Tesla.

Why would you release a performance review right whe you need all hands on deck?

 

Musk and Tesla most certainly trade on good will but continuously missing self imposed dead lines

without satisfactory explanation or perceived remedial action won't play well to maintaining confidence.

 

At some time, they are going to have a "moment of change" where large groups suddenly decide to bail out

Musk has these investors and true believers eating out of his hands and still, he can't get the damned thing rolled out.

Edited by jpd80
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