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Ex-Tesla employees describe the abrupt way they were laid off and say questions linger

Business Insider logo Business Insider 1/24/2019 Mark Matousek,Linette Lopez
a person standing in front of a car© Spencer Platt / Getty Images   

Tesla laid off 7% of its employees on Friday, seven months after cutting 9% of its workforce.

Tesla had expanded its workforce by 30% in 2018 as it ramped up production of its Model 3 sedan, CEO Elon Musk said in an email to employees on Friday, and he suggested this round of layoffs was necessary for Tesla to become consistently profitable while introducing lower-priced vehicles like the long-awaited $35,000 version of the Model 3.

But Musk had framed the 2018 layoffs as a decision Tesla would not have to repeat.

"We are making this hard decision now so that we never have to do this again," he told employees at the time.

Read more: Everyone who's telling you that Tesla is influencing the rest of the auto industry is completely wrong

Five former Tesla employees who were let go on Friday spoke to Business Insider about their time at the time company and how they were told they were being laid off.

Each former employee requested anonymity due to a fear of retribution from Tesla.

Were you affected by the Tesla layoffs? Have a story to share? Contact Business Insider's Linette Lopez at llopez@businessinsider.com and Mark Matousek at mmatousek@businessinsider.com.

'Like sheep to the slaughter'

One former employee, who worked in Tesla's delivery division in California, woke up on Friday to Musk's email. He said he tried not to think about it but found that difficult once he arrived at his office, where his co-workers were discussing the email. He noticed one of his managers was being quiet and "kind of standoffish" as he arranged chairs in the corner of the office furthest from the employees.

The manager told the delivery employee and around 15 of his colleagues to meet him by the chairs. There, the manager read from a script informing them they were being let go. The script sounded as if it had been written by Tesla's human resources department, the delivery employee said.

"I sat there in silence like a sheep to the slaughter," he said.

One colleague asked if he could speak with the manager one-on-one after the speech, but the manager declined his request.

The manager told the employees their positions had become redundant, but not everyone on the delivery employee's team was let go, and the manager didn't provide specific details about why each employee was being laid off. The employees weren't given details about their severance package, only a blank piece of paper on which to write their name and personal email address. The delivery employee then said his goodbyes, packed his personal items, and left.

"I just want to know why we were the people who were picked," he said.

The delivery employee said being laid off wasn't devastating since he had planned to leave the company later in the year, but the abruptness of the announcement bothered him.

"It's a very crappy way to treat your employees who have worked their butts off," he said. "Now, I have no idea what to do."

Overall, the delivery employee said he enjoyed his time at Tesla, especially the camaraderie with his coworkers, but he didn't feel that same bond with his managers and sometimes felt pressure to work long hours with no advance notice.

'I was in shock'

An engineering employee who worked at Tesla's Gigafactory in Nevada said she was surprised by the layoffs, citing Musk's assertion that the 2018 layoffs would be Tesla's last.

Around an hour after she arrived at work on Friday, management-level employees began pulling some of her colleagues into meeting rooms. An hour later, she was called into one of the rooms, told she was being let go, and asked to confirm her contact information. She was then accompanied to her desk, where her laptop was taken. She was directed to leave immediately.

The process took around five minutes, she said, and she was not given a reason for her termination.

"I was in shock," she said.

She was told she would receive two months' pay as severance, but hadn't seen the exact details of her severance as of Tuesday afternoon.

The engineer said she had liked her job at Tesla, particularly the ability to work with and learn from a variety of departments, but she wishes she had been given more information about why she was let go.

'It was actually a lot easier than I thought it was going to be'

A third former employee, who worked in Tesla's energy division in California, said that while she loved working at Tesla and was sad to see her time at the company end, she found it easier to be let go than to watch her colleagues be laid off and deal with the aftermath.

"Having seen everybody go through this before, being one of the people that remains, it is a lot harder than being one of the people that gets to go," she said.

After waking up on Friday morning, she read Musk's email and saw her manager had sent her a Google Calendar invite. Her meeting with her manager was brief, and she didn't ask why she had been let go since a conversation she had with another manager before the meeting suggested her manager hadn't been able to choose which members of his team would be laid off. She found the experience to be relatively painless since her team works remotely and wasn't in the office that morning.

"It was actually a lot easier than I thought it was going to be," she said.

She described Tesla as a demanding but rewarding work environment and said she felt pride in Tesla's mission and a close bond with her co-workers.

She doesn't mind having a few months of paid time off, she said, and the flood of messages she has received about professional opportunities has removed any anxiety she might have about her next step.

"People seem pretty eager to help me find a new job," she said.

It was another 'big purge'

A delivery experience specialist who was let go told Business Insider that this round of layoffs was just another one of Tesla's big "purges." They happened every six months or so at the company, she said. Employees would trickle out monthly too. Then every three months or so, there would be a jolt of new hires.

The logic of who was let go, the woman said, "was random" and the turnaround was the fastest she'd ever seen at any company.

"The managers who were at my store a year ago are not the same managers today. My store operates as a sales, service and delivery hub, and each role of management has been changed from January 2018 to January 2019. That's just management," she told Business Insider.

So ultimately another purge was expected.

She described her seven months working at Tesla as exhausting and chaotic. Her job was to prepare the paperwork for customers coming in to buy their cars. She would then go to a document signing that could take five minutes or an hour depending on the customer or how well the paperwork was done.

Then the customer would get a brief orientation of their car. According to her training this was all supposed to take about 15 minutes, but it usually took much longer and the result was a backlog of customers waiting. Sometimes she and her colleagues would have to get help from nearby vehicle centers.

Sometimes customers refused delivery of their cars because of damage, complicating matters even further, she said.

Going forward she sees fewer cars being delivered because of a reduction in the tax credit offered to Tesla customers, she said she also worries about competition from new entrants to the electric vehicle market like Porsche. But that doesn't mean she's lost faith in the company.

"I do have confidence that it's a great product. They have a good following still. They just need to hang on."

So this is my walk of shame

One supervisor at Tesla's Fremont factory said that his dismissal came as a total shock. He loved working at Tesla and found his colleagues to be incredibly supportive.

"I loved it, I loved what did. It was fast-paced, exciting, very demanding. Challenging at best, but I loved it."

He was also good at it, he said. He said he received an outstanding review in December with an extremely generous performance reward. So he said he had reason to believe he would make it through this round of layoffs untouched.

Plus, on the day of the layoffs he was informed that his team would be saved, so he assumed he was included in that. But at the end of shift on Friday, his immediate manager asked him to gather his things and go with him to HR.

"So this is my walk of shame," he asked his manager.

He was asked to turn in his laptop and expect paperwork from the company on Saturday.

As for his 2018 performance bonus, he said he was disappointed. Due to Tesla's bonus structure, he will only receive a portion of his 2018 bonus.

A Tesla representative said the company offers cash options that vest quarterly over a four-year period.

"I worked hard, I got a great bonus, and they just took it away from me," the supervisor said of his 2018 bonus.

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