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Tesla reportedly lays off 200 from Autopilot unit, rescinds some job offers

By Mike Murphy

CEO Elon Musk ordered 10% cuts earlier this month, sparking lawsuit claiming the layoffs violated labor law

Tesla Inc. has laid off hundreds of people in its Autopilot unit and has rescinded job offers to some new hires, according to new reports, as the electric-auto maker follows through with job cuts that Chief Executive Elon Musk warned about earlier this month.

Bloomberg News reported Tuesday that Tesla (TSLA) laid off about 200 employees as it shut down an office in San Mateo, Calif., that evaluated data from Tesla's Autopilot driver-assistance system. Bloomberg said about 150 other employees were transferred to a different office.

That follows a report Sunday by Business Insider that Tesla has recently laid off a number of new hires who started their jobs only weeks or months ago, and has withdrawn job offers to some who were planning on joining the company.

Tesla, which dissolved its media relations team, did not reply to MarketWatch's request for confirmation or comment Tuesday.

Last week, two of about 500 workers who were recently laid off from Tesla's Sparks, Nev., "gigafactory" sued the company, claiming the Austin, Texas-based auto maker violated federal labor law by not giving employees enough notice of the layoffs. Speaking at a Bloomberg conference in Qatar last week, Musk reportedly called the lawsuit "trivial."

In early June, Musk reportedly ordered all hiring to be paused and called for a 10% workforce reduction, saying he had a "super bad feeling" about the economy, Reuters reported. That came shortly after he issued an ultimatum, telling Tesla employees that remote work was "no longer acceptable" and to return to the office or "pretend to work somewhere else."

That ultimatum apparently caused problems in itself; The Information reported Monday that Tesla was unprepared for so many workers to return to the office en masse, with complaints of not enough desks or parking spaces and weak Wi-Fi signals in the office.

Tesla shares have slumped more than 36% year to date, compared to the S&P 500's 20% decline this year. Tesla is expected to announce its second-quarter sales numbers in the coming days, which are likely to be constrained by COVID-19 shutdowns in China.

-Mike Murphy

 

(END) Dow Jones Newswires

06-28-22 1923ET

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