Tesla Fires Hundreds of Workers for Poor Performance

Last week, Tesla terminated hundreds of employees for performance. The actual number has not been released, but estimates range from 400 to 1200 people. Regardless of the actual number, that’s a lot.

Usually, when companies terminate large numbers of people, they do so as part of a reduction in force or a layoffTesla is quite emphatic, according to the Mercury News that this is not a layoff. In fact, a Tesla Spokesperson said that they had not reported the terminations to California’s Employment Development Department, which the law requires in cases of layoffs of more than 50 employees.

Layoff or Fired? What’s the Difference?

Typically, when someone is laid off, it’s a recognition of either a business failure or a business reorganization. We say it’s not the person that is being terminated, it’s the position that is being eliminated, and the person is simply the unlucky person who happened to be sitting in that spot. Now, of course, if you have to terminate someone in relationship to a position elimination you pick the lowest performer, but there are certainly situations where a top performer can be the victim of a layoff. Once the person is terminated, the position remains unfilled. (This, of course, is a bit simplified, as there can be bumping rights, and reorganizations, and the like.)

To keep reading, click here: Tesla Fires Hundreds of Workers for Poor Performance

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9 thoughts on “Tesla Fires Hundreds of Workers for Poor Performance

  1. What rules does a company need to follow for a “reorganization”? Let’s say the company laid off one person in a reorganization, claiming that the business couldn’t justify that position. Then a few months later the company advertised for someone with the same duties, but as an independent contractor. Is that legit?

    1. yes that is legit. No rules for reorganization. The company can terminate you at any time as long as the reason for termination is not discriminatory under the law. Companies do this all the time. Eliminate regular employees and contract the work out. It is economics in many cases. Overall a contractor is cheaper than a regular employee.

  2. Elon Musk, the Tesla founder, is viewed by many as a genius. Indeed, he is a genius at sucking out grants, tax money, and other public funds from our tax dollars. This is just another of his well thought out scams. He runs a company that is ONLY successful because of millions in government grants and subsidies. Despite this, he sells his vehicles at a premium price. It is sad that we are not bright enough to realize this.

    1. Though the same could be said of companies that rely on government aid to subsidize their workers, like McDonald’s and Walmart, or those who get such deals as incentives, like Amazon. Subsidies aren’t unique to Tesla.

  3. Blaming Tesla for taking advantage of government loophole that allows him to get grants and money is not the problem. He is just using his assets.
    Problem is that the workers don’t have certain rights assumed by many that we have. Like the fact that an employer can never fire employees without reason. Unless a contract was signed detailing terms of employment, most employment is at will of the employers. Never assume your job is safe, always keep job skills current and adaptable to any job needed by employment.
    I am speaking from experience with my employers, who demanded changes in job performance to what efficiency experts deemed and non-compliance resulted in termination.
    To change the control over workers by employers, laws have to be put in place since the attitude toward unions who did protect workers from being terminated at will by contracts, has become negative.

    1. It does make it sound like incompetent management. If you have 500 people who are so bad they need to be fired, what was happening? They can’t hire or they can’t manage or something. Who was doing the work?

      1. I would be certain that supervisor & managers were part of the termination. This seems like a well thought out plan.

  4. Welcome to unfettered capitalism; this is Elon Musk after all.

    2-weeks notice is merely the “usual and customary” approach in the USA. I once gave just 2 days notice (for reasons that then, and now, seem fully justified.) I’ve come near doing it other times just because of how I was treated at the parting-company. (Most big companies have the official policy of only confirming dates of employment, so who cares? BTW: Always have solid references).

    We ‘mericans stand alone. We’re special.

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