Tesla (TSLA.O) has closed its office in San Mateo, California and dismissed about 200 employees working on its Autopilot driver-assistant system there, one of the people told reporters, in a move seen as speeding up cost-cutting.
The majority of the laid-off employees had been hourly workers, that person said. In early June, Tesla Chief Executive Elon Musk told top managers he had a “super bad feeling” about the economy and that the electric car maker needed to reduce staff by about 10%.
Later, the billionaire said that the 10% cuts would affect only salaried staff and that the hourly staff numbers were still anticipated to rise.
“Tesla clearly is in a major cost-cutting mode,” said Raj Rajkumar, professor of electrical and computer engineering at Carnegie Mellon University.
“This (staff reduction) likely indicates that 2Q 2022 has been pretty rough on the company due to the shutdown in Shanghai, raw material costs, and supply chain problems.”
Anti-pandemic measures in Shanghai have weakened Tesla’s production there.
The laid-off person who spoke to Reuters said staff at the satellite office had earlier been told that they would shift to an office in Palo Alto in stages starting June after the San Mateo lease expired. But most of the employees were dismissed on Tuesday.
“It was definitely kind of numbing,” he said. “Yeah, we’re definitely shocked; we’re definitely blindsided.”
Some employees thought Tesla would shift some of the jobs to lower-wage workers in Buffalo, New York, to lower costs. Tesla did not promptly respond to a request for comment.
Most people in Tesla’s San Mateo office work on data annotation – labeling and reviewing several visuals gathered from Tesla vehicles to teach the cars’ Autopilot system how to control certain kinds of road scenarios.
Buy Bitcoin NowSeveral Tesla data annotation employees said on LinkedIn on Tuesday that they had been dismissed. Caeser Rosas, a data annotation specialist, said on a LinkedIn post:
“So kind of a disappointing day today. Myself along with almost the whole San Mateo Branch at Tesla just got laid off.”
Bloomberg first published about the San Mateo job losses. Musk has also said Tesla’s new factories in Berlin and Texas are “gigantic money furnaces” depleting billions of dollars.
