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Print 81 comment(s) - last by Cypherdude1.. on Oct 20 at 9:31 PM

In the world of cold business dealings, the story of Tesla Motors recent cuts strikes particularly cruel

DailyTech previously covered the hot, but pricey Tesla Roadster, among the first of the next generation of electric cars which the Chevy Volt and others will soon be joining.  The Tesla Roadster was the product of Tesla Motors, a bright seeming startup with big dreams.  Despite the $100,000 price tag, hopes for the company are high.

Now Tesla Motors employees are finding the hard reality of the sagging economy is catching up to their company.  And worse yet in perhaps a sign of things to come, the company for which they had loyally worked has delivered them a particularly stinging rejection.

Corporate layoffs are nothing new.  Yahoo is contemplating more cuts, and Sprint and CNET were among others who made cuts earlier in the year.  Still, the layoff of roughly 90 percent of Tesla Motors work force at its Michigan location in Rochester Hills, 30 minutes north of Detroit stands out as unique and disturbing.

Workers at Tesla Motors showed up to work, just like any other day.  Some of them, unsurprisingly avid readers of auto-blogs took a quick peak on the internet to catch up with their morning news.  That's when a couple employees noticed that a story on auto-blog ValleyWag had news of Tesla Motor layoffs.  And the blog Jalopnik followed up that the layoffs would be taking place that day in Rochester Hills.

Logging on their own company site, sure enough it read that they were being laid off and were now obsolete.  Apparently no one had considered it a good idea to send them that memo, though.  Roughly 90 percent of the employees at the location received pink slips.  Tesla is reportedly cutting up to 100 employees, roughly half its workforce.  They're also demoting their CEO and replacing him. 

The few employees that weren't cut perhaps suffered an even worse fate.  They were ordered to relocate to Tesla Motor's San Jose headquarters and pay for the expense of the move themselves.  They would receive no increase in compensation.  Worst of all the company offered no help in selling their employees' homes, which will likely be a painful task amid Detroit's ravaged real estate landscape.

Perhaps most ironic of all was the pink slip message the employees being cut received.  The message read:

There will also be some headcount reduction due to consolidation of operations. In anticipation of moving vehicle engineering to our new HQ in San Jose, we are ramping down and will close our Rochester Hills office near Detroit. Good communication, tightly knit engineering and a common company culture are of paramount importance as Tesla grows.

While we certainly haven't seen the last of Tesla Motors, one certainly wonders if they can survive the rigors of the current economic climate with such a curious definition of "good communication."


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RE: ordered to relocate
By masher2 (blog) on 10/17/2008 11:35:58 AM , Rating: 2
No one is being "ordered" to move. They're being offered to retain their position if they relocate. This is something nearly all large firms do, though some may provide a hardship bonus, raise, or other relocation help to assist.


RE: ordered to relocate
By djc208 on 10/17/2008 12:14:51 PM , Rating: 2
Problem is, other than keeping a job, why would you want to? It's a lot of cost and risk for little reward, and they could still get cut tomorrow after all is said and done.

The worst part is they'll probably have a tough time growing out of this down the road. If they were to recover and need more people again who's going to want to work for them after this mess? The people they do get aren't going to be the best and brightest either, not without spending more than they would have if this had gone better.


RE: ordered to relocate
By masher2 (blog) on 10/17/2008 1:11:42 PM , Rating: 2
> "Problem is, other than keeping a job, why would you want to?"

If you want to stay, you're obviously more than welcome to. That's just the point..the employee (and employer) both have choice.

For the life of me, I don't understand why some people seem to think the freedom granted employees to work at will and shouldn't be granted to their employers. Any of these Tesla employees who had a significantly better job offer would certainly quit in a heartbeat -- possibly without even giving notice.


RE: ordered to relocate
By dubldwn on 10/17/2008 1:26:41 PM , Rating: 2
Funny you should say that, because that’s my beef with this whole thing: no notice. I get pissed whenever I read about people showing up to work Monday morning only to find they’re out of a job. Just like I’m pissed if an employee just stops showing up.


RE: ordered to relocate
By masher2 (blog) on 10/17/2008 1:35:49 PM , Rating: 1
Who said the employees did't get any notice? I didn't read that at all. They weren't locked out on Monday; they simply received pink slips-- notice that their job will eventually be cut.


RE: ordered to relocate
By dubldwn on 10/17/2008 2:16:41 PM , Rating: 2
Hmmm…when I read “pink slip” and “laid off” I figured that was their last day. I’m allowed to be wrong. Hope so, because I believe at least a 2 week notice is common courtesy.


RE: ordered to relocate
By Visual on 10/20/2008 6:35:33 AM , Rating: 2
Its not even about common courtesy, this is most certainly a clause of their contract. I don't know about the USA, but where I live clarifying that bit is required by law for all employment contracts. And I even think the minimum required period is a month.


RE: ordered to relocate
By djc208 on 10/18/2008 8:41:40 AM , Rating: 2
I don't have a problem with the choice aspect, or employers being able to fire/lay off people. Hell, wish it were easier to do at my job, but that's the downside of government jobs, they're secure for both good and bad employees.

My issue is with the way the company treats an employee (current or soon-to-be-former). If the company want's to treat the employees as slaves they shouldn't be surprised if they aren't loyal to the company. Same issue goes the other way too. This history comes back to haunt both sides eventually.

If Tesla develops a bad reputation as an employer then they will have a harder time getting tallented employees for decent wages that won't quit without notice.

As for why you would want to, well that was an honest question. Sure you have a choice but doesn't seem like much of one to me. You have to either really want or really need the job to take on that kind of stress (financially and personally) over a job that's still extremely tentative.


RE: ordered to relocate
By Mitch101 on 10/17/2008 12:17:05 PM , Rating: 2
I believe Ordered fits the description better when they aren't offering more than just their job in return.


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