Tesla fired hundreds of workers last week, in a move that is unusual for a large corporation. How many workers were let go is not clear, with some estimates going as high as 1,200 people. Tesla is required to notify the State of California of layoffs, but it says pointedly that these people were terminated, not laid off.
The company is being tight lipped about the reason for so many dismissals at one time, saying only that they resulted from annual performance reviews. The company has issued a statement claiming that those same performance reviews also resulted in an unspecified number of promotions. “As with any company, especially one of over 33,000 employees, performance reviews also occasionally result in employee departures,” the company says.
The United Auto Workers has been been trying to organize a union campaign at Tesla’s Fremont factory. The union has filed a complaint with the National Labor Relations Board alleging that Tesla has acted improperly in its attempt to blunt the organizing effort. A hearing before the NLRB is scheduled for November. Is there a connection between the UAW campaign and the firings?
Some of those who were let go certainly think so. “I had great performance reviews. I don’t believe I was fired for performance,” Daniel Grant told The Los Angeles Times. He has worked at the Fremont factory since 2014 as a production assistant and suspects he was fired because he raised safety issues and supported a union drive.
“The company didn’t show me or others our most recent reviews when they fired us,” Grant said. “I would like the company to release our full reviews, including peer reviews, to us.” Other workers on the production line tell a similar story. “Our reviews were due in June. In June they told us they would be in August. In September they told us October.” In the end, the workers who were terminated say they never saw those performance reviews at all.
Another factory worker, Mike Williams, says he also believes he was fired because he spoke up about safety issues at employee meetings and because he wore a union shirt to work. “I had a union sticker on my water bottle, too,” he says.
Forbes correspondent Chuck Jones says mass layoffs are unusual for a company that is experiencing rapid growth. “No matter what type (meaning positions) are let go, this creates disruption in a company not just for workflows but also lost productivity due to talking about what happened and what may happen.” He thinks the firings may make it harder for Tesla to attract highly qualified workers to fill the newly vacant jobs.
Tesla does not act like a typical company in any way, shape or form. Elon Musk is known to be a difficult person to work for. He demands a lot from his people and he has previously made his displeasure known about the union organizing campaign. He has made it clear that he considers any union activity to be a personal insult to him as he sees himself as the benevolent overlord of the Tesla empire.
There is more than meets the eye here, but what exactly is unclear. Tesla is struggling mightily to get Model 3 production going smoothly. It seems an odd time to be rocking the boat and cutting staff. Elon has his reasons, no doubt, but what they are remains a mystery. If a link is established between the firings and the UAW organizing campaign, Tesla and Musk will have opened a can of very large worms.
Even if no such link is established, some observers — like Forbes contributor Dale Buss — worry that the chaos surrounding the Model 3 production process indicates that Elon maybe needs a performance review of his own.