Why Tesla just fired ‘hundreds of workers’

Tesla’s stock closed down slightly Monday after news that it fired “hundreds of workers” in recent days as a result of annual performance reviews.

While the firings come as the company is experiencing significant production delays affecting the Model 3, Tesla said the dismissals — which involved hundreds of employees, according to some reports — were unrelated to those delays and would have no effect on the vehicle’s continued rollout.

In a statement emailed to The Washington Post, the company said a similar number of “employee departures” occurred last year. The company also noted that the firings involved mostly nonmanufacturing positions and that some employees were given bonuses and promotions after this year’s review.

“Like all companies, Tesla conducts an annual performance review during which a manager and employee discuss the results that were achieved, as well as how those results were achieved, during the performance period,” the statement said.

“As with any company, especially one of over 33,000 employees, performance reviews also occasionally result in employee departures,” the statement added. “Tesla is continuing to grow and hire new employees around the world.”

The company declined to confirm how many employees had been let go but said it plans to backfill the vast majority of the openings.

The San Jose Mercury News, which first reported the firings, said the departures included “engineers, managers and factory workers.” Employees told the paper that they received “little or no warnings” before the firings, which reportedly targeted 400 to 700 employees, leading to “lowered morale through many departments.”

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Juan Maldonado, a production worker, told the paper that he was fired last week after close to four years at Tesla. The 48-year-old speculated that his dismissal was the result of being late to work on two occasions in recent months.

“I’m going to try to find a job,” he said.

The firings come during an important period for the company that chief executive Elon Musk has characterized as “production hell.” That production surrounds the Model 3, the company’s first mass-market vehicle, for which Musk has set an aggressive production schedule — one the company has not kept pace with.

Musk’s original goal was for Tesla to produce 1,500 Model 3s in the third quarter, a sizable jump en route to increasing production to 20,000 vehicles per month by the end of the year and 50,000 a month by the end of next year.

But the company said earlier this month that it had produced only 260 of the 1,500 intended sedans during that period, blaming production issues.

“Model 3 production was less than anticipated due to production bottlenecks,” Tesla wrote in an Oct. 2 investor letter. “Although the vast majority of manufacturing subsystems at both our California car plant and our Nevada Gigafactory are able to operate at a high rate, a handful have taken longer to activate than expected.”

The company noted that there are “no fundamental issues with the Model 3 production or supply chain” and said that company officials understand “what needs to be fixed.”

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Tesla’s stock closed down 1.4 percent to $350.60 on Monday.

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