- On Tuesday, Tesla said it was laying off about 9% of its employees.
- Former employees told Business Insider they were surprised by the layoffs.
- In May, CEO Elon Musk said the company would restructure operations to boost profitability, though he didn’t discuss specific layoff plans.
The move came as a surprise to some employees, who told Business Insider they were given no advance notice about the possibility of being laid off.
During Tesla’s first-quarter earnings call in May, Musk said the company would restructure operations to boost profitability. At the time, he said Tesla would review its third-party contractors, though he didn’t discuss specific plans to lay off employees.
One former employee thinks more layoffs are coming
A former Tesla energy salesperson, who asked not to be identified by name, said her team members received an email at 1 a.m. on Tuesday asking them to clear four hours in their schedule that day for a video conference.
The video conference turned into a conference call with a human-resources employee and Brent Baldwin, the company’s director of energy sales in North America.
During the call, 250 people, including the salesperson’s entire training class, learned they would be let go, and Baldwin apologised for having to lay off salespeople who had hit their quotas, this person said. The former employee said that despite the apology, she and her training class were made to feel as if they had failed the company.
Musk said in his email that Tesla was laying off people now so that it would never have to do it again.
But the former employee said she believes this round of layoffs won’t be the last.
“My theory is that this is the first wave. I don’t think there will be enough business for the staff levels that they have,” she said. “I would be scared to lose my job if I still had one.”
The former employee started at Tesla in January and said she had to work nights and weekends to hit her quota while dealing with a shifting commission structure that made it more difficult to achieve her goals.
“Honestly, since I started with this company it’s been nothing but a disaster,” she said.
The company broke promises more than once, she said, adding that she was not reimbursed for mileage as promised and never received any company apparel. Tesla also didn’t mark out sales territory, so she would run into her coworkers in her region, she said.
In April, she said, solar salespeople signed a new commission plan that would prevent them from receiving commissions at different stages in the sales process. Instead, they would receive commissions only at the end.
The former salesperson said she would end up losing money she would have made under the old commission structure because she was laid off before some of her clients had their installations completed.
“There’s no way around it: They just got away with not having to pay people,” she said.
Tesla did not immediately respond to a request for comment about her claims.
Employees were caught off guard
Another employee, who worked in vehicle delivery and asked not to be identified by name, said he wasn’t aware of the meeting that would lead to his termination before he came to work on Monday morning.
An hour after he arrived at the office, two of his supervisors and a regional HR manager brought one of his colleagues into a conference room, putting the vehicle-delivery employee on alert.
“It was a little odd to see three managers show up,” he said.
Once his colleague left the conference room, she gathered her belongings and was escorted out of the building. The vehicle-delivery employee said he thought she had been fired for performance reasons – but once he was called into the conference room, he realised his position was being eliminated, he said.
He was given no advance notice of the meeting before Monday. For each of the previous two weeks, he had worked 60 hours over six days, he said.
He had worked for Tesla since 2015 and said that during his time at the company his team had to adjust to a sixfold increase in deliveries while being told to increase delivery speed. Despite the raised expectations, his team decreased from its original size.
“How are we understaffed and you’re still letting 9% of employees go?” he said. “It boggled my mind.”
A third employee, an engineer who still works at Tesla and asked not to be identified by name, said he discovered his manager had been let go after the manager didn’t show up for a meeting on Tuesday. When a colleague of his attempted to email the manager, the email bounced back.
He said he thinks Tesla fired the wrong people.
“I think it was really squirrelly how they did it,” he said.
If you’ve worked for Tesla and have a story to share, you can contact these reporters at [email protected] and [email protected]
NOW WATCH: Money & Markets videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.