Tesla’s employee count has increased almost 10 times since 2017. The company added 880 employees in 2018 alone. In addition, Tesla added over 20,000 square feet of production space and moved its engineering team into a separate building in Fremont, CA.
Tesla CEO Elon Musk said he would make sure his company would remain profitable even if they were forced to cut its workforce by half. According to him, eliminating the cost-cutting measure would lead to a loss of $500 million a year. He had previously planned to eliminate 2,800 jobs at its Fremont factory.
The number of workers who resigned from the company rose by 22% since July 2018. At least 70 people have quit or been fired since June 1st, 2019. Among them, 30 left voluntarily while 40 were let go.
One of those who quit cited the company’s culture change as a major factor behind leaving the firm. Others pointed out that employees were not given any information about what changes would happen following Musk’s decision to retain his original vision.
Tesla has already lost three senior executives and hundreds of staff members under the new management strategy.
The company plans to add 5,200 jobs globally in 2019. However, there is no guarantee that the company will hire these numbers.
Employees were told to expect layoffs in October 2019. A notice posted online stated that Tesla would move away from its traditional hiring process and instead rely on referrals to fill open positions. Most of the positions at the company are low-level and entry-level.
An anonymous Tesla driver claimed that the company planned to implement a payment system where hourly workers would receive significantly less than full-time employees.
Many current employees say they cannot bear working conditions at Tesla anymore. As a result, some of them decided to take legal action against the company. They filed a class-action lawsuit claiming that Tesla violated California labor law. These employees allege that Tesla did not properly compensate them for time worked and overtime hours.
Another group of former employees filed a claim in federal court alleging that Tesla misled investors and the public about its true financial situation. The plaintiffs also alleged that the company was hiding problems with its Model 3 ramp-up and its inability to build more battery packs.
Tesla has recently hired several new lawyers to handle the lawsuits.
The company hired the prestigious law firms O’Melveny & Myers and Latham & Watkins LLP. Both companies specialize in corporate finance and litigation matters.
Tesla denied all allegations and claims levied against the company in both cases.
The automaker argued that the lawsuits should be thrown out due to lack of jurisdiction and improper venue. The judges didn’t buy Tesla’s argument and rejected the motion to dismiss.