FREMONT — Tesla is cutting greater than 2,700 jobs within the Bay Area, including major layoffs at the corporate's electric vehicle factory in Fremont.
The workforce cuts on the Austin-based electric automotive maker, which has its technical headquarters in Palo Alto, represent the biggest single round of job cuts by a tech company because the tech sector began its current series of layoffs within the Bay Area in 2022.
The cuts come as Tesla is mired in a recession that affects electric vehicle makers worldwide. They also slam CEO Elon Musk, one in all the world's richest men, as he comes under increasing criticism for his controversial and provocative views on U.S. election integrity, white supremacy and more.
“The global adoption of electric vehicles is under pressure,” Musk said during a recent conference call with Wall Street analysts on Tesla’s first-quarter financial results. “Many other car manufacturers are withdrawing from electric vehicles and relying on plug-in hybrids instead.”
According to official WARN notices the corporate sent to the state Employment Development Department (EDD), Tesla will cut a complete of two,753 jobs within the Bay Area. An estimated 1,452 of the layoffs are expected to happen at an address that matches the vehicle factory's location in Fremont, in keeping with one in all the WARN letters. Layoffs are also planned at several other locations in Fremont and Palo Alto, in keeping with documents filed with the state.
According to WARN notices, the layoffs didn’t affect any unionized employees. Tesla described all the job cuts as everlasting.
The company didn’t reply to a request for comment on the situation.
Here Tesla is cutting jobs within the Bay Area:
– Fremont, 2,267 layoffs. That includes staffing cuts at Tesla facilities on Fremont Boulevard, Kato Road, Warm Springs Road and Page Avenue.
— Palo Alto, 486 job losses. This includes layoffs at Tesla locations on Page Mill Road, Hanover Street, El Camino Real and the Stanford Shopping Center.
In total, Tesla has reported plans to chop greater than 3,000 jobs within the Bay Area since 2022. The company isn't the one company within the tech sector to make significant cuts lately.
In December 2022, Facebook app owner Meta Platforms announced plans to chop 2,564 jobs within the Bay Area, primarily in Menlo Park. And in January 2023, Google announced plans to chop 1,629 jobs within the Bay Area, mostly in Mountain View.
In addition to the Bay Area workforce cuts, Tesla can be eliminating 515 jobs in Lathrop, San Joaquin County, and 64 jobs in Burbank, Los Angeles County.
According to the WARN letters, the staffing cuts will all occur over a two-week period starting June 14.
Tesla's profits and revenue have been declining recently. For the one-year period ending in March, Tesla made a profit of $13.61 billion and generated revenue of $94.75 billion. In the calendar yr 2023, Tesla made a profit of virtually 15 billion US dollars and generated sales of 96.77 billion US dollars.
During the conference call, Tesla executives referred to the corporate as a tree at one point and an evolving organism at one other, and said it was time for Tesla to chop jobs.
“We're basically going through this exercise where we're asking ourselves, 'How do we prepare this company for the next phase of growth?'” Vaibhav Taneja, Tesla's chief financial officer, told analysts. “If you think about it, every tree that grows needs to be pruned. This is the circumcision exercise we did.”
Musk said in a somewhat rambling comment that Tesla needed to scale back its workforce and refocus.
“It's time to reorganize the company for the next phase of growth, and you really have to reorganize it, just like a human, if we start with a cell and a kind of zygote, a kind of blastocyst, and you start, poor people and grow legs “In short, you have a tail,” Musk said.
Alex Potter, an analyst at Piper Sandler, interjected: “But you've lost track.”
“Hopefully you drop the tail,” Musk replied. “A company is like a growing creature. And if you don't reorganize it for different stages of growth, it will fail. You can’t have the same organizational structure when you have 10 cells versus 100 versus 1 million versus 1 billion versus 1 trillion.”
The cuts got here after Tesla's first-quarter results dismayed analysts.
“Tesla is clearly in a challenging period of delivery growth and this story will not change overnight, so patience is needed,” Wedbush analyst Daniel Ives wrote in a research note to investors following the earnings release.
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