Tesla just announced 9% staffing cuts.

[Jeff Hudson]

That weren’t layoffs. They were performance reviews.

I fixed it. Thanks for the reminder.

 

[electracity]

It's a significant percentage of salaried staff. Doing the layoffs is going to make recruiting more difficult.

What the layoffs mostly signify is that they are uncertain of their ability to go to the capital markets. It may also signal the solar city side of the business is not profitable. I'm sure the layoffs are very uneven across the companies.

 

[thegruf]

As the company evolves, the requirements of the business will change with time.

I see this as a natural part of that cycle, the model 3 is now designed and released, this particulat stage of all hands to the pump has passed. Investors will approve of the robustness of management to handle the company in a responsible manner.

Let's be real - it isnt the top 10% that will be leaving, mostly the bottom 10% performers.
Great incentive to the remaining workforce to perform.

Business is tough. Automotive one of the toughest.

 

[NeverFollow]

My delivery assistant didn't do anything, their job could be a computer.
The guy giving me the demo of the car didn't an okay job but nothing a bunch of videos couldn't do, better.
The "contract team" that took too way long to get me my paperwork should just be a computer too.
Most contracts are basic for the model 3 (right now) so I have no idea what they're doing and slowly at that.
I'm sure like most companies there is a bunch of extra weight,
it sucks for the people but it's a good thing for the company as a whole.

Last time I rented a car, I just walk to the car, use my phone app to open it, and find the key inside.

Some hotels provide a similar type of service.

When I make an order from Amazon, I receive a code to open a locker box.

I guess, in the future, after making an order for a new car,
a self driving car will drive directly from the factory's service center to my garage.
Et Voilà!

 

[BluestarE3]

Doing the layoffs is going to make recruiting more difficult.

This is a Silicon Valley company, so there's no expectation that you'd have a cradle-to-grave job. Similarly, employees don't feel any obligation to stay forever at any particular company if they find a better offer elsewhere. So, they'll have no shortage of applicants at all levels. Likewise, you'll continue to see reports of executive departures on a regular basis.

 

[electracity]

This is a Silicon Valley company, so there's no expectation that you'd have a cradle-to-grave job. Similarly, employees don't feel any obligation to stay forever at any particular company if they find a better offer elsewhere. So, they'll have no shortage of applicants at all levels. Likewise, you'll continue to see reports of executive departures on a regular basis.

They have recruited heavily outside northern California.

 

[NeverFollow]

Right now, numerous of employees must have an existential crisis similar to the robot from Rick and Morty:

Robot: "What is my purpose?"
Rick: “Pass The Butter!”
Robot: "Oh my god..."

 

[BluestarE3]

They have recruited heavily outside northern California.

As have many other Silicon Valley based companies. But that doesn't change the DNA of these companies.... unless there are local labor laws that take precedence.

 

[suwaneedad]

This could be as much as a $500 million/yr cost reduction layoff, at least on paper. That's a really big number, sufficient to appease the capital markets for an upcoming debt or equity issuance. But more importantly, it'll certainly help streamline communication and activity at least once the initial shock wave stuff internally subsides. It is the rare leader who can successfully be at the helm of both a startup and a massive maturing company. Time will tell whether Elon is rare.

 

[beachbum77]

At the end of last year, Tesla reported 37,000 employees. 9% of total is a reduction of thousands. My concern is how did the company get that out of control? Normally, in a rapidly growing company, you can't hire fast enough. In contrast, Elon allowed managers to hire thousands more than they should have. That to me, is a serous management concern.

The other thing missing is where these employees are located? Solar? Auto? Corp? Reno? Sales?

Way to go Dog! Someone is finally realizing the main issue. Why were thousands of unnecessary employees hired to begin with? This traces all the way back to the top and a total lack of interest in controlling costs until now. 3,000 or so employees translates into as much as $1 billion in wasted salaries and benefits over the last few years (not including stock options).

The question now is will 3,000 be enough? As a daily reader of all the Tesla fan sites, many early M3 buyers are not happy. Others are rejecting repainted Model 3's. New invites to configure have not gone out since April 28th. The largest daily production we have heard is 500 for M3 (or 3,500 per week if it can be sustained for 7 days). That is still almost 50% below the June 30th target of 5,000 per week with just over 2.5 weeks to go. Tesla will assuredly hit number 200,000 in Q3 and the countdown will begin for the full FITC which will run out on Dec 31st. If Tesla cannot reach and hold 5,000 per week on July 1st, tens of thousands of buyers will be affected in Q3 and Q4. Will Tesla shine or burn out like a supernova? Elon, enough promises. Let's see some real results. Shareholders are counting on you!

 

[EinSV]

Way to go Dog! Someone is finally realizing the main issue. Why were thousands of unnecessary employees hired to begin with? This traces all the way back to the top and a total lack of interest in controlling costs until now. 3,000 or so employees translates into as much as $1 billion in wasted salaries and benefits over the last few years (not including stock options).

The question now is will 3,000 be enough? As a daily reader of all the Tesla fan sites, many early M3 buyers are not happy. Others are rejecting repainted Model 3's. New invites to configure have not gone out since April 28th. The largest daily production we have heard is 500 for M3 (or 3,500 per week if it can be sustained for 7 days). That is still almost 50% below the June 30th target of 5,000 per week with just over 2.5 weeks to go. Tesla will assuredly hit number 200,000 in Q3 and the countdown will begin for the full FITC which will run out on Dec 31st. If Tesla cannot reach and hold 5,000 per week on July 1st, tens of thousands of buyers will be affected in Q3 and Q4. Will Tesla shine or burn out like a supernova? Elon, enough promises. Let's see some real results. Shareholders are counting on you!

Dang, Donn Bailey, is this the sort of thing you put in your 65 articles on Seeking Alpha concerning your short position on TSLA stock? Cause there is a lot of nonsense in this post.

Btw, you were not trying to suggest you are a Tesla shareholder with that bolded language, were you? Because that would be misleading, and you wouldn't want that, would you.

Guess short sellers are having a rough time lately. But still.

 

[Krugerrand]

This is a Silicon Valley company, so there's no expectation that you'd have a cradle-to-grave job. Similarly, employees don't feel any obligation to stay forever at any particular company if they find a better offer elsewhere. So, they'll have no shortage of applicants at all levels. Likewise, you'll continue to see reports of executive departures on a regular basis.

Didn’t we read/hear recently that Tesla gets something like 500,000 resumes a year? I hardly think recruiting/hiring because of this recent event is going to be an issue.

 

[Krugerrand]

They have recruited heavily outside northern California.

They recruit from all over the world, but the culture of the company is Silicon Valley. And largely young engineers.

 

[beachbum77]

Dang, Donn Bailey, is this the sort of thing you put in your 65 articles on Seeking Alpha concerning your short position on TSLA stock? Cause there is a lot of nonsense in this post.

Btw, you were not trying to suggest you are a Tesla shareholder with that bolded language, were you? Because that would be misleading, and you wouldn't want that, would you.

Guess short sellers are having a rough time lately. But still.

What bolded language? I did not type anything in bold, and I certainly never said I was a shareholder and am not a short seller of the stock either. I am an options trader and hold both calls and puts on TSLA at the moment. I have been having a ball with this rollercoaster ride!

You need to separate my financial opinions from my EV opinions. Yes, I think TSLA is overvalued and I invest accordingly. But as a car company, I cheer them on. Once the bugs are all worked out I want an SR MSM with 19"s for my around town car or a CPO Model S. But I need to see if Musk can captain the ship through 1H2019 first. I also have no interest in being a Beta guinea pig. With all the changes already made on the Model 3, by next year it should be a hell of a car if Tesla can get the paint issues solved. As an old car guy, I know NEVER to buy a new first-year of production car or truck (well okay, a mid-engine Corvette might be the exception in 2020. Should be a very collectible car.)

 

[Super_Popular]

If someone would buy my P85D I will help Tesla out and buy a new X

 

[beachbum77]

If someone would buy my P85D I will help Tesla out and buy a new X

Nice looking car! Good color choices too. Just too much car for a commuter car in my case. Best of luck in selling it.

 

[Super_Popular]

Thanks!

 

[voip-ninja]

This could be as much as a $500 million/yr cost reduction layoff, at least on paper. That's a really big number, sufficient to appease the capital markets for an upcoming debt or equity issuance. But more importantly, it'll certainly help streamline communication and activity at least once the initial shock wave stuff internally subsides. It is the rare leader who can successfully be at the helm of both a startup and a massive maturing company. Time will tell whether Elon is rare.

According to Musk Tesla does not need another issuance from here on out to reach profitability this year.

However these layoffs are just one of several things happening right now that appear to be aimed at giving the company a cash infusion and a cost cut.

1. Layoffs
2. Very aggressive promises of delivery in 4-6 months for those reserving today.
3. Possibly questionable labeling of features as FSD that some might view as EAP features.

We will see but next six months won’t be boring (ha!).

 

[beachbum77]

Last time I rented a car, I just walk to the car, use my phone app to open it, and find the key inside.

Some hotels provide a similar type of service.

When I make an order from Amazon, I receive a code to open a locker box.

I guess, in the future, after making an order for a new car,
a self driving car will drive directly from the factory's service center to my garage.
Et Voilà!

I used to think that was where Tesla was headed. But they post very little inventory online forcing you to call in and talk to a salesperson, who may or may not get back to you. I still do not understand why. Why can't I just see the inventory, and then decide how far I am willing to travel to go see/buy a given car. No, I am not going to pay $2,500 to have the car brought to me. I found my latest new Chevy truck in Wisconsin while living in Montana in 2012. Flew out, bought it and drove it back. Found it on Cars.com. I was at the dealer (who picked me up at the airport) all of about 45 minutes. If Chevy dealers can make it happen why can't Tesla?

 

[Jeff Hudson]

Thanks!

That's a nice looking Tesla. I'm curious though, did you retrofit the "black next gen front and rear seats" or did your 2014 P85D come with them? I ask this because my 2015 seats in my S85 are probably the one thing I am not satisfied with.