Elon Musk confirmed that the salaried workforce at Tesla Inc. would be reduced by about 10% over the next three months, but said the overall reduction in the number of employees at the electric carmaker would only be 3.5%, as the number of staff per hour is still expected to increase.
“We grew very quickly on the wage earner side,” Musk said in an interview with Bloomberg News editor-in-chief John Micklethwait at the Qatar Economic Forum on Tuesday. “A year from now, I think our headcount will be higher” in salaried and hourly workers, but for now the reduction will be 3% to 3.5%, he said.
The comments brought more clarity to the situation with Tesla’s staffing, after Musk made several internal and public statements about the reductions over the last month.
Tesla, now headquartered in Austin, Texas, has grown to around 100,000 employees worldwide, hiring quickly as it built new factories in Austin and Berlin. The cuts, which have so far affected human resources representatives and software engineers, caught many off guard, with several employees saying they would be laid off immediately. Two workers at Tesla’s battery factory near Reno, Nevada, allege the company failed to comply with a 60-day notice requirement under the Worker Adjustment and Retraining Notice Act, according to a lawsuit they filed Sunday. at night in federal court in Austin.
“Let’s not read too much about a pre-emptive lawsuit that is baseless,” Musk said in Tuesday’s interview via video link.
Tesla and Twitter shares rise after Musk speaks at the Economic Forum
The reductions come as Musk, 50, plunges into the work-from-home debate, a polarizing issue for employees and businesses alike as they navigate a return to normalcy as the pandemic recedes. Earlier this month, Tesla’s boss issued an ultimatum for company staff to return to the office or leave.
“Everyone at Tesla must spend a minimum of 40 hours in the office per week,” Musk wrote in an email titled “To be very clear.” “Also, the office should be where your real colleagues are, not in a pseudo remote office. If he does not show up, we will assume that he has resigned.”
“The older you are, the more visible your presence should be,” Musk wrote. “That’s why I lived in the factory for so long, so that those on the line could see me working alongside them. If he hadn’t done that, Tesla would have gone bankrupt a long time ago.”
The mandate has also spooked workers at Twitter Inc., which has had a work-from-anywhere policy during the Covid-19 pandemic. Before sealing his deal to buy the social media platform, Musk floated the idea of turning his San Francisco headquarters into a homeless shelter because “nobody shows up anyway.”
On the contrary, he has praised the workers at the Tesla factory in Shanghai. Many lived and worked on the site to keep production running for much of the Chinese city’s two-month Covid lockdown earlier this year.
“I’m very impressed with auto companies in China, just companies in general in China,” Musk said Tuesday. “I think they are extremely competitive, hard-working and smart.”
As for competition from the world’s top automakers, Musk said Tesla doesn’t really think about potential rivals. The main problems facing the company have to do with supply chains and its own production capacity.
“Demand for our cars is extremely high and the waiting list is long,” he said. “We don’t really think about the competition, we just think about how we address the limiting factors in the supply chain and our own industrial capacity.”
“Basically, we need to build the factories faster,” he said. “And then we need to look ahead to choke points across the entire lithium-ion battery supply chain, from mining and refining to cathode and anode production and cell formation.”
To learn more about Musk at the Qatar Economic Forum, click here to access our TOPLive blog. Or read a full transcript of the interview.
The Qatar Ministry of Trade and Industry, the Qatar Investment Authority and the Qatar Investment Promotion Agency are the sponsors of the Qatar Economic Forum, powered by Bloomberg. Media City Qatar is the host organization.