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Tesla fires hundreds of workers even as Model 3 production ramps up

Tesla has fired hundreds of employees across both its Palo Alto, California headquarters and its Fremont vehicle production factory, according to a report from The Mercury News. Citing interviews with former and current employees, the report puts the firings at between 400 and 700 people, and they affected everything from factory workers to engineers to managers. According to The Mercury News, workers were not given advance notice of the decision.

Tesla, in a statement, cited a company-wide annual review and said that it had not laid employees off, but rather that it let employees go based on lackluster job performance. “As with any company, especially one of over 33,000 employees, performance reviews also occasionally result in employee departures,” a company spokesman told The Mercury News. “Tesla is continuing to grow and hire new employees around the world.” Tesla says it plans on filling a “vast majority” of the vacancies with new hires.

Tesla claims most of the employees let go were in sales and administration, and that the firings will have little effect on the roughly 10,000-strong factory workforce in Fremont. Still, Tesla is currently behind on production of its Model 3 sedan. CEO Elon Musk decided to delay the announcement of Tesla’s new Semi truck product to November to focus on getting the Model 3, which is Tesla’s most affordable and mass market car, out the door. More than half a million people are currently on the waiting list for the Model 3, which starts at $35,000.

In a report issued last week, Tesla said it had only delivered 220 Model 3s out of 260 produced, putting the company far behind the 1,600-unit benchmark Musk had set forth back in July. Tesla, which cited “production bottlenecks” for coming in under its target, has an ultimate goal of ramping up production to 10,000 vehicles per week by the end of next year. Yet a damning Wall Street Journal report that same week said Tesla factory workers were making parts of the Model 3 by hand because the assembly line is not yet fully operational.

It’s unclear how the firings will affect Tesla’s ability to produce more of Model 3s, and the number of factory workers affected could very well be small. But hundreds of employees now gone certainly doesn’t appear like it will help.

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