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Tesla's Mass Firings Spread To SolarCity as Employees Say They Were Blindsided (cnbc.com)
Tesla has laid off over 200 employees from its SolarCity business for performance reasons, just over a week after firing hundreds more from its motor vehicle division. From a report: Employee dismissals at Tesla are continuing, according to six former and current employees, and have spread from its motor division to SolarCity offices across the U.S. Echoing reports from earlier this month, these SolarCity employees say they were surprised to be told they were fired for performance reasons, claiming Tesla had not conducted performance reviews since acquiring the solar energy business. Earlier this month, Tesla began firing hundreds of employees after it announced a recall of 11,000 Model X SUVs. Tesla had already announced plans to lay off 205 SolarCity employees at its Roseville, California, office by the end of October this year. However, SolarCity employees across the country have been fired in the last two weeks -- not just in California, but also in Nevada, Arizona, Utah and beyond, according to these employees.
SolarCity was well on its way to bankruptcy. The only reason Musk bought SolarCity was to save his cousins and the SolarCity bonds he owned - at the expense of Tesla shareholders. And all it took was a lame presentation showing fake solar tiles to convince them.
I am betting it has more to do with the company image than anything to do with employess rights. Saying they were firing people for performance reasons instead of laying them off due to financial reasons makes you think the company is still doing well financially.
WTB [sig], PST!!!
It's interesting how few people are buying the "low performer" claims. The claims don't really make sense on their face; why would Tesla suddenly discover that its ranks are shot through with masses of people who need to be *immediately fired*? How could things have got so out of hand to require such a drastic immediate step? And how would those management culture problems suddenly be found in completely separate organizations that had been acquired a year ago?
Here's my theory: Tesla has figured out that sometime in the not-quite-near future cash is going to get tight because of its portfolio of buck rogers projects. How far in the future? Well, far enough that an outsider wouldn't see it in the quarterly SEC filings but near enough that they can see it coming. In business cash is like your air supply. If I cut off your air supply you'll be in distress in one minute and unconscious in three. If a business runs out of liquidity to meet current demands it starts coming apart in a month and is unable to operate after a quarter. This can happen even if the business is making a profit; meeting immediate cash demands has surprisingly little to do with turning a profit.
So what you do when you discover cash is going to be tight is look for cash outflows you can trim, and almost always payroll is going to be the biggest one. You start looking for people you can manage without. Low performers are an obvious choice, but if you've been doing your job all along you don't have a lot of those heads to chop. So you also look for people who simply pull down the larger salaries than others doing the same job. If my hypothesis is true, both Tesla's claims and the fired employees counterclaims could have a kernel of truth in them.
But why not simply tell people that this is what they're doing? I think because a lot of Tesla's value is based on an aura of invincibility it has cultivated -- despite or perhaps even because of its past missteps, people believe in this company; they think it will succeed and they want it to succeed. But again if this is what's going on it's risky to in effect libel thousands of workers you've let go for financial reasons.
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