Elon Musk is getting a lesson in the real world of automakers. I have a lot of respect for Mr. Musk, how could you not? He’s one of the wealthiest people in the world and figured out how to get the U.S. Government to fund many of his endeavors. However, he wasn’t in the real world of automotive with Tesla until he got competition from virtually every other automaker in the world. It would appear reality is setting in. Tesla struggled for 14 years before turning a profit.
Tesla has dramatically dropped its pricing on most of its models to try to maintain a majority share of the electric vehicle market, however, America is pushing back on EVs until there is more battery range, more charging stations, and more affordable prices.
Tesla is said to have considered getting into the incentive game and there is even talk that they may be forced to (eek!) ADVERTISE. Mr. Musk is faced with the challenges that face even the best car companies in the world. To add even more pressure, Tesla stock has dropped 31% in the last year. Quality issues continue to haunt Tesla, as does growing pressure on whether the Tesla “Autopilot full self-driving” technology is safe.
I give Elon Musk credit for making the necessary, albeit painful, decision to lay off 10% of his workforce worldwide. This will affect over 14,000 jobs, but it is nothing that hasn’t been done by every other auto manufacturer in the world at one time or another. Employees who were being laid off were notified by email this past Sunday night, after midnight.
Business Insider obtained a copy of the memo which they posted on their website:
As part of this effort, we have done a thorough review of the organization and made the difficult decision to reduce our headcount by more than 10% globally. There is nothing I hate more, but it must be done. This will enable us to be lean, innovative, and hungry for the next growth phase cycle.
I would like to thank everyone who is departing Tesla for their hard work over the years. I'm deeply grateful for your many contributions to our mission and we wish you well in your future opportunities. It is very difficult to say goodbye.
For those remaining, I would like to thank you in advance for the difficult job that remains ahead. We are developing some of the most revolutionary technologies in auto, energy, and artificial intelligence. As we prepare the company for the next phase of growth, your resolve will make a huge difference in getting us there.
Thanks,
On Wednesday, April 17, Elon Musk sent an internal email saying that the severance pay for many of the laid-off workers was “incorrectly low.” He apologized for the
mistake and said, “it is being corrected immediately.” Ironically, Wednesday
Musk asked the Tesla Board of Directors to reinstate his pay package, which
would amount to $56,000,000 (56 billion dollars). It was struck down by a
Delaware judge earlier this year who said the pay was “deeply flawed.”
Musk also asked the Board to approve, his second request, to reincorporate
Tesla from Delaware to Texas.
