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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.

37 of 272 comments (clear)

  1. Happened to me by 110010001000 · · Score: 4, Funny

    I am one of those affected. Anyone have a $50,000 per year job for me in Silicon Valley in IT?

    1. Re:Happened to me by 110010001000 · · Score: 2, Funny

      So you are saying I am a bottom performer?

    2. Re:Happened to me by farble1670 · · Score: 2

      Tesla may be using those reviews as a basis for these firings

      Were they firings or layoffs? Big difference.

      Most tech companies do this thing every couple of years where they "realign their business" which is code for layoff any bottom feeders without having to do the paperwork and avoiding possible legal action related to a firing.

    3. Re:Happened to me by Anonymous Coward · · Score: 5, Informative

      "Right-to-work" is about union busting.

      It is about having the choice to belong to a union or not.

    4. Re:Happened to me by PolygamousRanchKid+ · · Score: 3, Funny

      Anyone have a $50,000 per year job for me in Silicon Valley in IT?

      Does it have to be in IT . . . ? Otherwise $50,000 per year is what a good housekeeper in Silicon Valley expects.

      Your experience at Tesla will be a big plus, since potential employers will think that you are capable of washing their model S . . .

      --
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    5. Re:Happened to me by tattood · · Score: 4, Interesting

      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.

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    6. Re:Happened to me by swb · · Score: 5, Insightful

      Wasn't GE famous (or infamous) for doing this?

      I always wondered if it achieved anything truly productive. 5% is a big enough number that it would seem to have a pretty negative effect on the company -- termination processing, new hires, training, and the general chaos on teams/departments when there's a bunch of change.

      I can even see side effects, where people who do well in a job get management positions, become "low performers" and get canned. Sure, they've cut a low performer but they also lost someone good at their original job because, basically, they fired the original manager. Now they need two employees.

      I would also think it created a pretty toxic atmosphere and a lot of just people trying to meet goals versus actual productivity.

    7. Re:Happened to me by Anonymous Coward · · Score: 3, Insightful

      In a very large corporation with a lot of dead weight morons, running such a program (properly) for a few years will clean up the mess and make the company more functional. However, such a program cannot be run in what is essential perpetuity as was the case with Jack Welch. You get to a point where every worker you have is good and you're not going to find better people consistently.

      There comes a point where if a company is constantly firing 5% of its employees, the people that really need to be fired are the management for hiring the lousy workers in the first place. On that count, Welch deserved to have been fired after 5 or 10 years.

    8. Re:Happened to me by mcguirez · · Score: 2

      There was a very good look at this effect a few years back. Mirosoft emulated GE's technique of laddering everyone and cutting the bottom rungs. The problem wasn't a specific layoff but rather how this rolling layoff poisoned the climate. People were focused on their own survival rather than any team goals. This is long but worth reading...

      https://www.vanityfair.com/new...

      --
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    9. Re:Happened to me by pak9rabid · · Score: 2

      It's a big deal getting hired again when your previous employer argues that you were terminated for "performance reasons".

      It's a good thing that businesses aren't allowed to ask your previous employer why you terminated then.

    10. Re:Happened to me by Aighearach · · Score: 2

      "Performance review" is a controversial management practice that most companies in the world do not do. It is not some sort of required step.

      Most companies do not add things up and then review them later in that way; they evaluate your performance whenever it comes up. If your numbers are chronically low and your supervisor notices, that might result in a notation in your file, and a conversation with you about your work practices, and you'll probably be asked to reaffirm your commitment to the job. The employee has no right to access to their file; they don't know if HR has something recorded about them, or not. It isn't "their" file, it is their employer's file that merely talks about them.

      If you have some other facts that are enough to get you into court, then you'd get access to some of those files as part of the discovery process; but you're not going to able to just file a suit with no facts in order to go on a fishing expedition through their employment records. Unless something actually happened to you at work that was improper, and you have witnesses willing to testify to that effect, you're not going to be able to do anything. Employers have a right to choose who to employ, and to set the performance standards. If you can't meet their expectations, it is your responsibility to quit if you don't like being fired "for cause."

    11. Re:Happened to me by pastafazou · · Score: 5, Insightful

      No, the union represents only it's members. The non-union members are free to attempt to negotiate the same deal the union negotiated, or try and get a better deal. The company is free to attempt to negotiate a deal that is better for the company. The union doesn't die unless the majority of employees feel they can do a better job negotiating than the union can.

    12. Re:Happened to me by DarkVader · · Score: 2

      It's too bad that's completely untrue.

    13. Re:Happened to me by istartedi · · Score: 2

      Union advocates often like to point out that they gave us the 40 hour work week. But wait... nobody has to belong to a union to get that now. Nobody pays dues to get it. See where I'm heading here? If there's no union, and you feel like your rights are being violated, you can use the political process and get laws pass via broader activism. The best part of all is that once the battle is won, you only have to pay the "dues" of vigilance to make sure the laws aren't repealed. It's a lower cost.

      It used to be that this virtual union was the Democratic Party; but they sold labor down river ages ago. This is part of why Trump won.

      --
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    14. Re:Happened to me by TWX · · Score: 2

      Unions can be beneficial when key managerial employees are jerks too. They serve two purposes in these cases, first, to help reduce unevenness in assignments within a given labor pool, such that the boss doesn't get to play favorites as much as the boss might like, and second, to act as an advocate when a boss might be seeking uneven punitive action against an employee when that employee's behaviors are not statistically different than the rest of the workers.

      Now, this doesn't mean that the unions always do a good job of this. Sometimes unions end up protecting terrible employees. Sometimes the presence of a union coupled with lazy managers that aren't willing to give regular performance reviews or otherwise document behaviors or results means that bad employees that really should be taken to task are not.

      --
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    15. Re:Happened to me by rtb61 · · Score: 2

      Pretty obvious reasons why. New company, lots of hires, all got a little out of control (one bag egg at a higher level can hire a dozens of others) and Tesla was falling behind schedule and was looking for reasons why, well, they found them and let them go. Typical teething problems for a new company with seeking lots of new employees. They will get a lot of bad ones.

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    16. Re:Happened to me by reve_etrange · · Score: 2

      "for cause," as happened here

      Please. It's clear both incidents were mass lay-offs. In the Solar City division performance reviews hadn't even been carried out.

      --
      .: Semper Absurda :.
  2. Not a surprise Tesla is winding down SolarCity by fozzy1015 · · Score: 5, Interesting

    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.

    1. Re:Not a surprise Tesla is winding down SolarCity by oic0 · · Score: 4, Insightful

      Not saying he didn't, but if you are trying to save a faltering company, culling the workforce of non vital positions and underperforming employees is a start.

    2. Re:Not a surprise Tesla is winding down SolarCity by 110010001000 · · Score: 3, Interesting

      But surely Musk is going to get us all to Mars and build a colony there? He promised.

    3. Re:Not a surprise Tesla is winding down SolarCity by zlives · · Score: 4, Insightful

      you know what will fix this high demand issue... more firings.

    4. Re:Not a surprise Tesla is winding down SolarCity by mspohr · · Score: 2

      Not true. The only time you can be denied unemployment is if you were fired for misconduct ( stealing, lying, failing a drug or alcohol test, falsifying records,etc.). Poor performance is not misconduct.

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    5. Re:Not a surprise Tesla is winding down SolarCity by AmiMoJo · · Score: 2

      He promised a fully automated drive from coast to coast by the end of this year. That's the closest promise that will be broken.

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    6. Re:Not a surprise Tesla is winding down SolarCity by King_TJ · · Score: 2

      I got the impression that Musk saw potential in SolarCity as aligning with his claims that electric cars are more environmentally-friendly. If you don't use alternative energy sources like solar to charge the cars up, you run into the issue where you're just drawing power from power plants often still burning coal or oil. Furthermore, if that's the usual scenario for charging stations, it dis-incentivizes adding them where they're most needed. (EG. Parking garages people use in big cities all day while at the office. They're not going to spend the $'s to not only install a good number of them but for the bigger electric bills to keep them operational for everyone. Most people think garage parking rates are sky-high as it is.)

      I'm absolutely sure part of his decision DID have to do with trying to help out his cousins, too. But to be fair? I think he saw a way the business fit into the big picture of what he was selling.

      Ultimately though? Tesla Motors truly offered a product that the competition couldn't match. It may be the first time in the history of the automobile where a new player came along and outdid ALL of the established name brands. SolarCity, by contrast, survived more on big marketing pushes and name familiarity. The actual services rendered (solar panel installation with either solar leases/loans or outright purchases) are pretty much imitated by many other competitors out there, often with superior pricing. And that Tesla "PowerWall" storage battery they're trying to sell as an accompanying product? Again... I don't see why Tesla Motors can't market that with or without SolarCity? It's still not normally a cost-effective solution for people, given its high price. It'll be enough of a niche so it needs to be offered by pretty much ALL solar vendors to see good sales.

  3. How To Make Your Company Toxic 101 by E-Lad · · Score: 4, Insightful

    I cannot see Tesla's long view in their reasons here. They are a high-profile set of companies (Solar City, Tesla, Boring Co. and SpaceX among others) and this news has hit major outlets - not just niche industry rags. It would be in their best interest to get out in front of this and provide some detail; but they have not. The arbitrariness of the reasons given for firing employees en masse is now what is in the history books for them, and this will surly dissuade talent from desiring to work for a Musk company in the future. Uber is another big-name entity that is walking this same line due to the narrative around its work environment.

    1. Re:How To Make Your Company Toxic 101 by 110010001000 · · Score: 2

      It is almost as if the executives are in it to make money and cash out or something and they aren't interested in what history books say about them.

    2. Re:How To Make Your Company Toxic 101 by hey! · · Score: 3, Interesting

      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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  4. When did the definition of "mass" change? by Nutria · · Score: 3, Insightful

    200 people out of (according to Wikipedia) 15,000 (that's 1.33%) is in no way shape or form a *mass* firing?

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    1. Re:When did the definition of "mass" change? by CanHasDIY · · Score: 2, Insightful

      "Mass" in this case just means "a whole bunch at one time," for example "mass mailing" refers to sending a bunch of pamphlets to a bunch of people all at once; It doesn't imply any particular percentage.

      FWIW, canning 200 people at once is a lot to do in one fell swoop, regardless of company size.

      --
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  5. Not sure if they were all really blindsided by Anonymous Coward · · Score: 4, Informative

    I have an acquaintance that worked for Solar City in the Roseville area, who had been told this was coming and was offered either a severance package or a job at Tesla in NV. This person isn't someone with a super unique skill set either and seemed to speak like it was common knowledge this was coming soon.

  6. Really, not that newsworthy. by djbckr · · Score: 5, Insightful

    Seriously, companies do this all the time and it doesn't cause any news at all. Just because it's Tesla (an interesting company from a nerd's point of view) does this make a splash. And really the firings weren't that big of a percentage of the work force

    This is just business as usual.

  7. Re:He also promised re-usable rockets. by 110010001000 · · Score: 2

    So I should pack my bag and get ready?

  8. Re:Tesla is violating the WARN Act by 110010001000 · · Score: 2

    Doesn't apply because it is less than 33% of the workforce at each site. Those HR people know all the tricks!

  9. Solar bubble popping maybe? by ErichTheRed · · Score: 2

    Everywhere I've worked, companies go out of their way to try to avoid firing people purely for performance. It's hard to stop vindictive individual managers from singling people out for...special attention...but I've never worked in mandatory-firing environments. This is most likely a cost-cutting measure. Everywhere I've been, people have been more than made aware of their poor performance before being let go...no one doesn't see it coming. Once you get put on a performance improvement plan, you're on notice that it's nearly time to leave.

    SolarCity might be trying to shed workers as the solar bubble dries up. We looked into solar systems for our house recently, and all of the companies are charging way too much for them, for any purchase option (loans, leases, outright purchase.) They're relying on the tax breaks to cloud the real cost of the equipment and maintenance, and (IMO) banking on the fact that most people don't know how their taxes are calculated. They just see they're getting a "huge" tax credit, resulting in a "huge" tax refund, and not taking the calculation to the next level and seeing how much the equipment cost is marked up. When the tax credit goes away, only a few of these companies are going to survive. The whole bubbly nature of this shows too -- you can tell that some of the local companies are these fly-by-night outfits with owners who jump from scheme to scheme and are just latching onto the latest way to make money.

    I like the idea of solar, but I'm not going to pay massively marked up rates for a system. Most people just shovel a shoebox full of receipts to their "accountant" and can't figure out their own taxes, or just punch numbers into TurboTax. I think the solar companies have run through these people and are having trouble selling/renting solar panels to the rest of the homeowning population.

  10. Re:union issues as well by nospam007 · · Score: 2

    "You can't fire someone for talking about starting an union."

    Not quite. You can't _tell_ a person you fire that it is because he tried to start a union.

  11. Firings will continue... by bettodavis · · Score: 2

    Until morale improves.

    It totally works.

  12. Re:Isn't it common to layoff the worst preformers? by bobbied · · Score: 2

    I've worked in places like this... Horrible places to work.

    I worked at a now defunct Telco that routinely let the bottom 5% or so go each year, depending on how the numbers looked. Where it was good to dump the chaff, they often didn't consider the whole picture when they did this. I helped maintain the software for their telemarketing efforts and I knew one of their representatives who for three quarters had blown the doors off his "plan". In fact, as % of his plan he was their highest producer for 9 months of the year. Now if you exceed your plan in a quarter, they keep increasing your plan, so by the forth quarter, he didn't do so well, had some health issues which kept him off the phones and ended up in the bottom few percent and got let go. They where idiots..

    The place was rife with back stabbing and sabotage as everybody clambered to stay at the top of the heap. It was a horrible place to work.

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