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Tesla Layoffs Continue · Elon Musk Podcast

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  Welcome back to the Elon Musk Podcast.
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  This is a show where we discuss the critical crossroads that
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  shape SpaceX, Tesla X, The Boring Company, and Neuralink.
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  And I'm your host Will Walden. Tesla is continuing its severe
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  layoffs now into the 4th week, affecting multiple departments
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  within the company. Employees from software,
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  services and engineering divisions have been dismissed,
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  with the layoffs being initially reported by Electric and
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  Business Insider, and report surfaced of affected workers
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  sharing their layoffs on professional networks like
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  LinkedIn. Recent job cuts were executed
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  over the recent weekend in early Monday, according to affected
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  employees. However, the exact number of
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  affected employees remains undisclosed and Business Insider
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  said that at least seven employees had announced their
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  layoffs on Sunday alone. These layoffs are part of a
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  broader reduction effort that began last month, where Tesla
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  initially aimed to reduce its global workforce by 10%,
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  totaling 14,000 employees from its 140,000 strong workforce
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  now. This significant cut included
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  high level positions, notably Tesla's head of EV charging,
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  Rebecca Tenucci and her entire team of 500 people.
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  Now, Tesla CEO Elon Musk has articulated a need for a
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  significant reorganization of the company every five years.
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  In a company wide e-mail, Musk emphasized the necessity of the
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  layoffs, stating that employees working under executives who do
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  not meet the standards of excellence, necessity and
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  trustworthiness would be dismissed.
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  And Musk's motivation for the layoffs appear to be influenced
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  by financial concerns, as he privately expressed the desire
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  to reduce the company's workforce by 20%, mirroring a
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  decline in quarterly vehicle deliveries.
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  Now Tesla's financial health is showing strain, with a 55%
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  decrease in profits year over year amid falling sales, and the
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  company faces increasing competition in key markets such
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  as the US and China, and a global decrease in demand for
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  electric vehicles. And despite the company's
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  challenges and vehicle sales, Musk is pivoting Tesla's focus
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  towards autonomous vehicles. He's promised the release of a
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  fully autonomous Robo taxi later this year, signaling a shift in
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  company strategy away from the low price $25,000 budget EV.
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  Now following the dismissal more than 10% of Tesla's workforce,
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  the company has further reduced its employee base, including the
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  termination of senior executives and veterans such as the entire
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  Supercharger team. Now Tesla began this round of
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  layoffs by eliminating multiple teams at the Gigafactory in
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  Texas and reducing production shifts which included firing
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  significant executives connected to vinyl projects.
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  And among those layoffs were key personnel such as Drew Baglino,
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  former VP of powertrain and energy engineering, and Rohan
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  Patel, head of policy and business development, signifying
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  a major shake up within the company's leadership.
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  In news of these layoffs was first brought to light through
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  internal communications confirmed by reports in The
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  Information, which highlighted impending exit of Rebecca
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  Tanucci and nearly her entire team of 500 people.
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  Now Tanucci, who had played a crucial role in expanding
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  Tesla's Supercharger network and in negotiating the adoption of
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  the North American charging standard, the NAX was recognized
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  as a significant figure in this industry.
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  Her departure suggested potential shift in Tesla's
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  approach to its charging infrastructure strategy.
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  Tesla plans to continue some construction on new
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  Superchargers, although the overall strategy appears to be
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  scaling back even as the demand for faster charging solutions is
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  increasing. Another significant layoffs was
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  that of Daniel Ho, Director of Vehicle Programs, indicating
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  potential issues within the team responsible for new product
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  initiatives at a time when Tesla anticipates a slowdown in sales
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  growth pending the release of new vehicle models.
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  These layoffs occur against the backdrop of an industry wide
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  trend where tech companies are reducing their workforces
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  despite relatively high profits and Tesla's decision to cut jobs
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  follow similar moves by other tech giants, reflecting A
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  cautious or possibly reactive approach to market conditions.
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  Now some people like to criticize the dismantling of a
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  Supercharger team. The people over at Electric and
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  I definitely enjoy their work over there and they said that it
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  was a poor strategic move given the current industry dynamics
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  and recent milestones achieved by the team under Tenucci's
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  leadership. And right now I would have to
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  agree with them. You can tell that everybody's
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  going towards the NEX plug system and I don't know why they
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  would scale down their charging team.
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  If other companies are going to start using NEX unless they have
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  something already lined up where they can manufacture them
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  cheaper or they can have a different team do installations
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  or cover the groundwork for other companies like Ford and
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  other large manufacturers. I'm not sure why they laid off
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  the whole team. Maybe there's going to be a a
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  huge restructuring and they're going to make the team a little
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  bit more lightweight, but I don't know why they would fire
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  the head executive of that team. That's a weird strategy.
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  Now it's a, it's a very important to to think about the
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  people that have been laid off and if there's going to be
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  20,000 people being laid off, where those people are going to
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  go? Are they going to other tech
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  companies or are they going to go to other vehicle companies?
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  We'll see some really talented people possibly go to
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  competitors of Tesla, and that's OK.
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  We need the competition. Tesla needs the competition.
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  They've been to the forefront of electric vehicles forever.
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  And they could use some definite competition to kind of push them
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  around a little bit because they're the big dog and they
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  need some some people to show them that they're not the best,
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  even though currently they are. So competition breeds excellence
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  and we're going to see some new people in new roles in probably
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  some old companies. And it's going to be a very
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  hectic and very great time for the next, in the next few years
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  for the EV market. And the broader impact of these
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  layoffs on company morale is profound.
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  Think about it. If 14,000 people get laid off,
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  that's a huge chunk of the workforce.
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  You never know who's going to be next, and you know they're
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  facing uncertainty about their job security.
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  The atmosphere is exacerbated by the timing of these layoffs,
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  which coincides with a proposed significant payout to Tesla.
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  CEO Elon was supposed to get 10s of billions of dollars due to
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  his work that he's done with Tesla.
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  And since he's making so much money, sure, there's some people
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  that wonder why he had let so many people go and not just give
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  him a little chunk of that and keep him around, but I guess
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  that's not how you make a successful auto and AI company
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  like Tesla. How the ongoing Tesla layoffs
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  might not yet be concluded, though there could be some more
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  as there's speculation about further reductions in the
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  uncertain environment suggests more challenges ahead for the
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  company as it continues to navigate significant internal
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  restructuring and external market pressures.
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  tomorrow.