Did Tesla just lay off 9% of it's global workforce?
- The Youth's Lens
- Jun 17, 2018
- 2 min read
An analysis of the what, why, how of the current move by Tesla to lay off 9% of it's global workforce, and it's effect in the future by our economist Rishika Jain.
What happened?
Tesla, a high growth company laid off about 9% of its workforce as part of a plan to restructure the company. This was said to be a thorough reorganisation that was done to achieve profitability in the rest of the year.
Before this action was taken, an announcement was made by the CEO of this multinational company, Elon Musk that informed us about the plan to ‘flatten the management structure.’
What about the MODEL 3!?!
All of this is said to not affect the production of Model 3 that they targeted for in the coming months. In addition, the company is open to hiring people with the required skillset for the same.
Improving communication, reducing costs and removing inefficiencies was the motive behind such a hard decision which Musk claims will never be done again. However, in such a fast growing company, who can believe that this decision will never be made again? Moreover, if in the future Elon Musk does indeed have to break this promise, the workers and employees would lose faith and their trust in him as well as the company. A result of this would be decreased job security. Not to mention the increased unemployment which is the primary effect of these lay offs.
Tesla claims the laying off was thought through and to minimise the impacts, the workers being let go would receive ‘‘significant salary and stock vesting (proportionate to length of service).”
How did they even lay off so many workers?
According to what some of the employees have said, they believe, their firing wasn't based on bad performance reviews and the terminations haven’t been rightfully justified to the ones victimised from this. Such a move, may cause a decrease in popularity of the company among workers and the public.
Was it really necessary for the future?
This move was necessary because the reasons for employing before do not hold justice anymore and to improve the functionality such a compromise needed to be made for the long term betterment of the company. Since the shift to sustainable and clean energy, workers with slightly different experience and knowledge are required.
Tesla being a growing company, has shocked people with these mass terminations which were tough but necessary as the company aims to become more profitable.
Bibliography and References
https://electrek.co/2018/06/12/tesla-layoffs-workforce-restructure/
https://www.businessinsider.in/Tesla-to-lay-off-up-to-9-of-its-employees-as-it-restructures/articleshow/64563572.cms
Written by Rishika Jain, Edited by Chandan Samal
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