Entire Supercharging Team Fired?

News yesterday is that the entire 500+ person word-wide SC team has been let go. That is alarming. Why would Elon sack the execs and all the employees of this important part of Tesla's business? Could Tesla be selling the SC network off to a third party? Opinions? Other theories?

 

[mborkow]

Equity is not “free”. If cost cutting is meant to increase shareholder value by balancing cash flows, granting hefty equity compensation dilutes and reduces it. There’s a fine balance point - to motivate and align executive’s interests you want to reward equity but beyond a certain point that dilutes and erodes value for other shareholders. So yes, while that equity comp does not affect current liquidity, it very much affects share value for Tesla investors. Musk has a duty to maximize shareholder value - presumably the layoffs are supposed to do that by propping the company’s cash flow balance. He could also do that by giving up on some of that equity reward. As others have pointed out, if equity was free they’d be donating it out as severance.

I never said it was free. I said his pay doesn’t impact their revenue stream (or profits). As such, no one is incented more than he to maximize shareholder value (which makes some of his decisions even more bizarre)

But shareholders don't seem to care as much about equity compensation. They care about actual profit, which layoffs help improve, but reducing equity compensation doesn't.

Yes, very well stated.

 

[stopcrazypp]

I don't have twitter, but saw this posted in another article. Elon apparently responded specifically to certain sites:

Twitter Embed

https://twitter.com/x/status/1785450753571557632

https://twitter.com/x/status/1785461086688256361

 

[Milan Djabirov]

I never said it was free. I said his pay doesn’t impact their revenue stream (or profits). As such, no one is incented more than he to maximize shareholder value (which makes some of his decisions even more bizarre)


Yes, very well stated.

Well if that were true than he should be granted say half the company’s equity- he’d be even more incentivized. But that’s a very bad idea. His comp is excessive- he’s not focused on the company 100% as he should be, he has failed to predict the plummeting margins and stunted ev demand growth (these gigafactories gotta keep pumping cars or else), and he’s acting erratically and with little accountability (presumably his board’s fiduciary role but who believes they perform it).

 

[chermle]

I think this is exactly the right sentiment... "in spite of".

There were a lot of early years where Tesla survived because of him, but that's just not the case any more. The company would be better off without him in 2024.

I have to agree. Most "rock stars" don't produce hits off of their lives.

 

[stopcrazypp]

Well if that were true than he should be granted say half the company’s equity- he’d be even more incentivized. But that’s a very bad idea. His comp is excessive- he’s not focused on the company 100% as he should be, he has failed to predict the plummeting margins and stunted ev demand growth (these gigafactories gotta keep pumping cars or else), and he’s acting erratically and with little accountability (presumably his board’s fiduciary role but who believes they perform it).

Most shareholders don't care about that as long as the stock price is high, which is why previously shareholders didn't care about most of his shenanigans in the past, nor that he splits his time at other companies. The main difference at this timing is that Tesla stock has crated in recent months, so shareholders are not happy. Yet at the same time, it still responds positively when he does erratic actions that are positive (for example skyrocketing 15% just this Monday on his sudden China visit to get FSD approval).

 

[Ben W]

Agreed with the vast majority of responders here that Elon's move is an appallingly bad one, for countless reasons.

The "$25k car" slated for next year will undoubtedly have somewhat lower range than the existing base models. (Currently 272mi / 260mi for Model 3/Y, respectively.) I just went on a 3500-mile roadtrip in my Model Y LR (310-mile range), CA -> AZ -> NM -> TX and back, and the Supercharger spacing made it surprisingly challenging at times, with numerous "single point of failure" sites that would have completely stranded us in an outage. (And some that did delay us by hours due to overcrowding and broken / reduced-power chargers.) In a 200-mile car, the trip would have been extremely difficult, if not practically impossible, even with all Superchargers operational. As it was, there were some waypoints we really wanted to reach but couldn't.

In the next 3-5 years, Tesla will need to roughly double the Supercharger density along most rural interstate routes, to accommodate the anticipated upcoming fleet of millions of "$25k" cars with reduced range. (Both their own, and competitors.) Slashing the entire Supercharger team and buildout will not get this done. Even if many of them are eventually re-hired, the trust for external contractors or companies to work with Tesla on this has now been badly damaged, if not destroyed.

Looking further ahead, future Tesla vehicles will likely need very specific upgrades to the Supercharger stations. (E.g. Robotaxi may need an autonomous "Snake" mechanism to plug/unplug without humans in the loop.) If Tesla abandons its own buildout, and if by the end of the decade the majority of NACS L3 charging sites are therefore built and operated by competitors, good luck getting them to support autonomous Robotaxi charging. They also may decide not to support the Tesla Nav system that makes charging integrate so seamlessly with the car's software, unless Tesla had the foresight to make this a condition of licensing the standard. But as far as I know, although other manufacturers have tentatively committed to supporting the NACS spec in their vehicles and adapters, there are no NACS Supercharging stations yet other than those built and operated by Tesla. So there is no guarantee that further NACS buildout (new stations) will happen at all, unless Tesla does it themselves. And they've just kneecapped their own ability to do so.

To me, this situation ranks right up there with "Elon buys Twitter" and "Trump wins 2016 election" (sorry for the politics) in terms of giving me that sinking feeling, in terms of the future feeling so much brighter had it not happened, or gone the other way. It may be survivable, but it feels like such a massive and avoidable self-inflicted setback. Sigh.

 

[SpiritAdriftM]

I certainly hope the board does NOT approve his mega bonus unless there is something big in the works. Giving the guy a bonus while laying off people AND risking NACS adoption is narcissistic.

 

[Transformer]

and if the other post is true, there were sites that had everything ready to go and were sitting for months waiting for activation.

In northern California, sites (like the one on Loucks Ave in Los Altos) can wait many months for a PG&E connection to the grid as a consequence of PG&E layoffs. (More info in the relevant sub-forum.)

Surely Tesla was pushing on PG&E and negotiating.

 

[Ken Brown]

What about the new product development team that was also reportedly fired in its entirety? That was mentioned early on but news reports don’t cover it much. Do we know anything more about that?

Once you fire an entire group responsible for a complex business function, you have irrevocably lost the institutional knowledge needed to perform that function. You are not going to rehire many of those people, even if you’re willing to admit that firing them was a mistake (and I think we all know the likelihood of any such admission!). So IF it’s true that both groups were completely disbanded and shown the door then Tesla’s ability to bring new vehicles to market or expand the charger network is simply gone.

I don’t think people are over-reacting to this.

 

[brkaus]

I don’t think people are over-reacting to this.

I’m shopping for an f150 lightning now.

 

[gearchruncher]

I certainly hope the board does NOT approve his mega bonus unless there is something big in the works.

The board already approved it. But it has to go to a shareholder vote, so it will be up to them/us if he gets it or not. Although this may also not be found legal in the Delaware court, which why the board has also recommended a corporate move to Texas and shareholders are voting on that as well

 

[stopcrazypp]

What about the new product development team that was also reportedly fired in its entirety? That was mentioned early on but news reports don’t cover it much. Do we know anything more about that?

Most of the reports don't seem to focus on that, probably because there was no number attached to how many people were in his team. From this article it seems those two executives and their teams were cut to set an example, and Elon was not happy with how deep of a cut they did in the previous round of layoffs.
Tesla lays off Supercharger, new model launch teams – report

Once you fire an entire group responsible for a complex business function, you have irrevocably lost the institutional knowledge needed to perform that function. You are notgoing to rehire many of those people, even if you’re willing to admit that firing them was a mistake (and I think we all know the likelihood of any such admission!).

He did a similar move for Twitter and later admitted his mistake.
Elon Musk says Twitter will try to rehire some of its laid-off staff, and that some of the people he fired 'shouldn't have been' cut

So IF it’s true that both groups were completely disbanded and shown the door then Tesla’s ability to bring new vehicles to market or expand the charger network is simply gone.

I don’t think people are over-reacting to this.

Depends on how the job market is going forward. If there is lots of demand for people in this sector, Tesla may struggle to rehire or to hire replacements. If the rest of the industry is also doing mass layoffs, then that is a different story.

 

[CuriousWren]

Why should we step back and see it from this perspective? We don't know this is what Tesla is planning. It's pure speculation.

This entire thread is speculation. The answer I quoted is the most logical explanation.

 

[SouthFLGuy]

Will the fanboys now admit it's time for a new CEO?

 

[SouthFLGuy]

Elon Musk is not Cobra Commander nor Palpatine despite the media narratives.

Well he plays them on TV really well.

 

[zroger73]

I’m gunna leave this here since it’s not only Tesla laying off “core” employees

Google lays off hundreds of 'Core' employees, moves some positions to India and Mexico — CNBC

Google is laying off more employees and hiring for their roles outside of the U.S.

apple.news

I work for a small, mature, stable company that designs and manufactures industrial machinery.

Days after Tesla's move, one of the owners of the company unexpectedly announced that we were cutting 10% of our work force.

Among those that were cut were ALL of the employees who were responsible for final assembly and testing of one of our product lines - in short, we just fired an entire department. All were kind, hard-working, loyal employees - most of them long-term. One was sending his kids through college. Another was undergoing cancer treatment. We were told that these cuts were made due to performance issues and that the slowdown lessened the burden on the company by giving others time to cross-train and fill the roles and find and train replacements to prepare for busier times.

Those of us who remained were stunned at the news. The rest of the day was pretty gloomy and morale took a hit.

The next morning, I observed several employees cleaning and organizing their work areas and becoming more productive than I've ever seen them.

Admittedly, the department that received the cuts had been loafing along with "good enough" for years without any significant improvements or cost cuts.

Starting over is expected to allow the department to reset with new blood resulting in a faster assembly, better quality, and more efficient productivity.

 

[TomServo]

The NACS connector is still superior to the CCS connector with or without Tesla.

The industry would be foolish not to adopt it.

Seems to me all the other DCFC manufacturers/companies will want to chase all that NEVI money and given the NACS connector is now the standard doesn't that mean that any new station built by these folks be essentially Tesla SuperChargers albeit without the sexy Tesla equipment and logo. They were just given a second chance, let's see if can run with it. Tesla didn't need to carry the entire load.

 

[cptnslo]

I work for a small, mature, stable company that designs and manufactures industrial machinery.

Days after Tesla's move, one of the owners of the company unexpectedly announced that we were cutting 10% of our work force.

Among those that were cut were ALL of the employees who were responsible for final assembly and testing of one of our product lines - in short, we just fired an entire department. All were kind, hard-working, loyal employees - most of them long-term. One was sending his kids through college. Another was undergoing cancer treatment. We were told that these cuts were made due to performance issues and that the slowdown lessened the burden on the company by giving others time to cross-train and fill the roles and find and train replacements to prepare for busier times.

Those of us who remained were stunned at the news. The rest of the day was pretty gloomy and morale took a hit.

The next morning, I observed several employees cleaning and organizing their work areas and becoming more productive than I've ever seen them.

Admittedly, the department that received the cuts had been loafing along with "good enough" for years without any significant improvements or cost cuts.

Starting over is expected to allow the department to reset with new blood resulting in a faster assembly, better quality, and more efficient productivity.

Thank you for this response. I appreciate you commenting in a cool manner and being informative. This is the type of information is indeed useful and should be seen by people who think the world is ending

 

[texas_star_TM3]

Agreed with the vast majority of responders here that Elon's move is an appallingly bad one, for countless reasons.

The "$25k car" slated for next year will undoubtedly have somewhat lower range than the existing base models. (Currently 272mi / 260mi for Model 3/Y, respectively.) I just went on a 3500-mile roadtrip in my Model Y LR (310-mile range), CA -> AZ -> NM -> TX and back, and the Supercharger spacing made it surprisingly challenging at times, with numerous "single point of failure" sites that would have completely stranded us in an outage. (And some that did delay us by hours due to overcrowding and broken / reduced-power chargers.) In a 200-mile car, the trip would have been extremely difficult, if not practically impossible, even with all Superchargers operational. As it was, there were some waypoints we really wanted to reach but couldn't.

100% agree. there's a lot of single point of failure locations on many routes. If Clayton / NM ever goes out ... a lot of folks on the Dallas-Denver corridor will be stranded and forced to slow charge for hours at a NEMA 14-50 RV park there. Now on Dallas- Houston / Austin / San Antonio there's plenty of locations - so even if one fails you are fine.

 

[KelvinMace]

Everyone, huh? I don't see a lot of "everyones" in this particular discussion.

Lots of personal attacks over what seems like a business move that you may not agree with. To the point where when someone steps in to say: "maybe we should hold off on our judgement until we at least know any relevant details over what actually happened" is received as a pro-Elon, anti-good things, Hitler supporter who also kicks puppies for even daring to utter such a polarizing thing publicly.

That should be a sign that your stance on something may not be based on reality when someone with a neutral idea on the topic is received as an enemy of freedom & liberty.

Imagine when it becomes acceptable to attack the voice of reason for merely asking for civility until we know the facts. Like that guy is somehow the enemy because he doesn't blindly support the witch hunt efforts. None of these same people will show up to apologize months from now if/when it's discovered that it was the right move. I've seen it a dozen times.

Once again, let the record show that I'm not fighting with people that it's the right decision. I'm just asking people to keep the door open to that possibility and treating others with respect until we know. That's worthy of attack?

You are correct, my remarks were harsh, and I apologize.

I still assert that Musk's actions are part of an increasing trend or erratic behavior demonstrated by his writings on Twitter which are quite damaging to the brand. I think his actions of late speak less about "hard business decisions" and more about vindictive and spiteful actions against those who disagree with him, who he judges disloyal.