There is a man who is throwing his weight around

CBS News

Several employees describe the situation as Elon Musk “throwing his weight around” to solidify his status after being mostly absent over the last year.
Musk is now all over Tesla or at least, his presence is being felt everywhere at Tesla.
Now, Electrek has learned that Musk also gutted Tesla’s cathode material manufacturing team in Texas.
Musk said that Tesla still plans to grow the Supercharger network but with a focus on existing stations: We reported that Tesla has already backed out of leases for new Supercharger stations.
Sources familiar with the matter believe that some of the layoffs have nothing to do with hiring inefficiencies or restructuring, but rather with Musk throwing his weight around Tesla.
The Supercharger team did something incredible: build the only successful and liked fast-charging network in North America, which is critical to EV adoption.
Even if Tesla sees its own sales slowing down, the Supercharger network will need a capacity increase.
Tesla has hiring inefficiencies leading to layoffs and layoffs inefficiencies leading to new hires.

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We’re learning more details about Tesla’s ongoing layoffs. Elon Musk is allegedly “throwing his weight around” in this situation, according to a number of staff members, to maintain his stature after being largely absent for the past year.

However, he is bearing down on us like a deadly wrecking ball.

For the past year and since his acquisition of Twitter, Musk has not been as often at Tesla as he was, according to people familiar with the situation who spoke with Electrek.

In recent weeks, that has altered.

At this point, Musk is everywhere at Tesla, or at least his influence is felt throughout the company.

Two weeks ago was when the first round of layoffs began. With his typical justification of increasing the workforce too quickly and creating hiring inefficiencies with redundant positions, Musk revealed that Tesla would be laying off roughly 10% of its workforce.

But the first we heard about those plans a day earlier, the word was that closer to 20 percent of the workforce might be laid off.

Indeed, the layoffs are still going on.

This week, Tesla initiated a new round of layoffs that affected the whole charging department.

Musk also fired Tesla’s Texas-based cathode material manufacturing team, according to information obtained by Electrek.

It began earlier this month with Anthony Thurston, Senior Manager, Cathode Materials and Manufacturing at Tesla, but Electrek has learned that Musk has since let go of the majority of the team.

People with knowledge of the situation describe the current state of affairs at Tesla as challenging. The main emotions felt in the offices are uncertainty, confusion, and frustration.

The rumors that the car engineering and design departments are next for Tesla have been verified by multiple sources.

Musk expanded on his remarks regarding the layoffs during last week’s Tesla earnings call. This time, he claimed that the company was being “reorganized.”.

We’ve adjusted a few things along the way. However, you truly need to reorganize the business in order to prepare it for the upcoming stage of growth.

The reasoning behind some of these actions is being attempted to be understood by analysts and Tesla enthusiasts, and most people find it difficult to comprehend the firing of nearly the entire charging organization—roughly 500 individuals.

According to Musk, Tesla still intends to expand the Supercharger network, but it will concentrate on its current stations first.

Tesla has already backed out of agreements to lease new Supercharger locations, as we previously reported.

According to sources, Tesla will struggle to expand the network in the absence of Rebecca Tinucci, the company’s former head of charging.

After realizing it couldn’t complete the work without a fired employee, Tesla has in the past hired them back.

This is making some of the layoffs’ rationale and effectiveness questionable.

According to people with knowledge of the situation, Musk’s influence over Tesla is more likely to be the reason behind some of the layoffs than ineffective hiring practices or organizational reorganizations.

Electrek was informed by two sources that Tinucci resisted pressure from Musk to fire a greater proportion of her staff, so the CEO chose to fire everyone as a show of strength.

On Sunday, Musk sent the following email to executives:.

“Hopefully, these steps are demonstrating that we must have a strict policy regarding headcount and cost containment. Although some executive staff members are taking this seriously, the majority are not doing so just yet. “.

The message is crystal clear: either you and your entire team will be fired, or fire as many people as I ask.

Viewpoint of Electrek.

It’s obvious that this goes beyond ineffective hiring practices and reorganization. Musk’s tidying up. He may be very concerned about the state of the economy and the short-term prospects for Tesla’s sales, but he did not discuss it during last week’s earnings call.

There may be additional topics at hand. Although it is a plausible theory, I’m not sure if I totally agree that Musk is securing his leadership position at Tesla.

The vote on his compensation package is becoming a vote of confidence in the CEO, as I have explained before.

He benefits from these layoffs in that regard. There is a significant loss of leadership. Musk’s importance at Tesla increases with each departure of a top executive. Not to mention that all these leaders are offloading their stocks so they won’t be voted against him, helps.

But it begs the question, is this truly beneficial to Tesla?

Building the only popular and effective fast-charging network in North America, which is essential to EV adoption, is something the Supercharger team accomplished with amazing success.

It’s absurd to fire the entire staff because the CEO was attempting to reduce the number of layoffs; this is especially true if expanding the network is still the goal. Since Tesla is currently adding other automakers to its network, it needs to expand. The Supercharger network will require a capacity increase even if Tesla experiences a slowdown in its own sales.

It’s a total mess, according to everyone I spoke with at Tesla. Contractors have lost contact with Tesla for the majority of ongoing Supercharger projects. Once more, a lot of people believe Tesla may attempt to rehire some of the employees it fired.

Tesla has hiring inefficiencies that result in layoffs and layoff inefficiencies that result in new hires.

It does not look nice.

If Tesla’s finances are truly in the gutter, that’s the only way I can support Musk on this. Although Tesla’s financial statements don’t show it well right now, it’s possible that internal metrics, such as incoming orders, are very different.

I’m reminded of Tesla in 2019 by some of this. Although everything appeared to be going well, Tesla started a massive cost-cutting campaign. Later, we found out that Tesla was close to filing for bankruptcy due to its failure to foresee the high cost of launching the Model 3 in large quantities in Europe.

Musk delayed telling shareholders that Tesla was trying to reduce costs because the lengthy transit time was putting a lot of financial strain on the company.

While Tesla is currently in a completely different situation with $27 billion in cash on hand, perhaps there is something similar going on that we are unaware of.

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