Tesla is cutting 7 percent of its workforce, says road ahead is "very difficult"

midian182

TechSpot Editor
Staff member

“Tesla will need to make these cuts while increasing the Model 3 production rate and making many manufacturing engineering improvements in the coming months,” said Musk. “There isn’t any other way.”

Tesla currently employs over 45,000 people, which means the layoffs could affect 3000 workers. It also said it intends to keep only the most critical temps and contractors.

Sales of the Model 3 had helped Tesla to an unexpected profit in Q3, but Musk said that would likely be lower in the fourth quarter. "This quarter, as with Q3, shipment of higher priced Model 3 variants (this time to Europe and Asia) will hopefully allow us, with great difficulty, effort and some luck, to target a tiny profit,"

The cheapest version of the most affordable Tesla goes for $44,000, a price Musk wants to reduce to $35,000. “Starting around May, we will need to deliver at least the mid-range Model 3 variant in all markets, as we need to reach more customers who can afford our vehicles.”

"Moreover, we need to continue making progress towards lower priced variants of Model 3."

Earlier this week, Tesla said its customer referral program would end on February 1 as it was no longer financially feasible.

In June last year, Tesla cut nine percent of its workforce as it searched for profitability.

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Humza

TechSpot Staff
Staff member
As groundbreaking and revolutionary as their cars are, Tesla still has its strength in software and not cars in general. Maybe they pivot down the road to licensing their tech and software prowess to other premium car brands because the latter have got car first, tech second; Tesla has it the other way around.
 
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Uncle Al

TS Evangelist
Musk is going to have to understand that until he makes a car that is competitive in the range of $20-30K he will continue to flounder. While this would be the very base model, it allows much more of the market to catch on. No reason he can't make it upgradeable to the $40-50K range but he needs to bring that most basic model as low as possible. With nothing more than a radio, heater & A/C he would find a good market, especially with those that are just starting out and don't have wealthy parents. Being able to order a car customized to the individuals taste is going to be a key factor as well. It worked for many decades in this country and there is no reason that it won't work again. There is something about the excitement of "waiting" until that magic delivery date that builds enthusiasm & excitement, two key elements to successfully marketing "new & different". He forgets that those are the folks that will work their way up to the bigger and better products.
 
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Scorpionking20

TS Booster
Musk is going to have to understand that until he makes a car that is competitive in the range of $20-30K he will continue to flounder. While this would be the very base model, it allows much more of the market to catch on. No reason he can't make it upgradeable to the $40-50K range but he needs to bring that most basic model as low as possible. With nothing more than a radio, heater & A/C he would find a good market, especially with those that are just starting out and don't have wealthy parents. Being able to order a car customized to the individuals taste is going to be a key factor as well. It worked for many decades in this country and there is no reason that it won't work again. There is something about the excitement of "waiting" until that magic delivery date that builds enthusiasm & excitement, two key elements to successfully marketing "new & different". He forgets that those are the folks that will work their way up to the bigger and better products.
Sounds like Elon should give you a job! You could fix all his problems.
 

gusticles41

TS Evangelist
As groundbreaking and revolutionary as their cars are, Tesla still has its strength in software and not cars in general. Maybe they pivot down the road to licensing their tech and software prowess to other premium car brands because the latter have got car first, tech second; Tesla has it the other way around.
That's what's always impressed me about Tesla - They've been a self-sustaining company with no background in vehicle production. If they aren't able to find that profitability one of the big auto makers will scoop them up, no doubt.
 
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VitalyT

Russ-Puss
Finally, Tesla starts feeling heat from the competition. Here in Ireland Model S P100D, fully loaded sells for 190,000 euro, which is beyond ridiculous. One can buy a new Mercedes S350 here for 98,000 euro. And there are plenty of cars here for 1/4 of the price that offer better build quality inside out and comfort. I bought a new Audi A6 for exactly 1/4 of that money, and it has way better interior and driving comfort.
 
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MasterMace

TS Booster
Finally, Tesla starts feeling heat from the competition. Here in Ireland Model S P100D, fully loaded sells for 190,000 euro, which is beyond ridiculous. One can buy a new Mercedes S350 here for 98,000 euro. And there are plenty of cars here for 1/4 of the price that offer better build quality inside out and comfort. I bought a new Audi A6 for exactly 1/4 of that money, and it has way better interior and driving comfort.
What competition? Your comparing apples and oranges. A Tesla is an all-electric vehicle. The only luxury car company that competes is Jaguar (good luck with that) with their I-Pace now (SUV), and soon their e-Type Zero.

Mercedes has no all-electric vehicle. Their SUV is coming out first, it's still not done testing. Their Sedan doesn't come out for at least a year after the SUV.

Audi has no all-electric vehicle. Their e-tron SUV is supposed to start shipping "spring 2019".
Audi e-tron Starting price $75,000. 160mile range, 355HP.
Jaguar's iPace Starting price $70,000, has 234mile range, 394 hp.
Tesla Model X starting price $85,000, 237mile range, 518hp.
Ireland should see a 10% price hike on all American vehicles due to the EU's common tariff.

Apples to apples, Tesla outperforms Audi's option, and Tesla got it out the door years before Audi. Make sure you don't buy that Jaguar, and you lease it instead so you can return it before it breaks like every other Jag.
 
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redgarl

TS Enthusiast
You might like or hate Musk, but Tesla as a wakeup call for the auto industry. I hope it is going to work in the long term because they drive software and patents for everyone. Obviously Tesla biggest issue was manufacturing cost due to poor design choice especially for the frame of the car.

Tesla might be forced to ally with a big constructor for making cars. That would help them drive cost down with modular design that can be translated to multiple models.

Nissan-Mitsubishi-Reno did it and other car makers will need to do it to drive cost down.
 
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That's what's always impressed me about Tesla - They've been a self-sustaining company with no background in vehicle production. If they aren't able to find that profitability one of the big auto makers will scoop them up, no doubt.
You can't be serious. "self-sustaining"?!?

https://www.zerohedge.com/news/2017-06-11/its-confirmed-without-government-subsidies-tesla-sales-implode

As Bloomberg writes, and as Elon Musk knows all too well, the results confirm that "clean-energy vehicles aren’t attractive enough to compete without some form of taxpayer-backed subsidy."


 
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wiyosaya

TS Evangelist
Musk: "I'm cutting 7-percent of our workforce so that we can reduce costs".

Translation: "I'm cutting 7-percent of our workforce so that we can force the remaining workers in the affected areas to increase their output by 15-percent and take up the slack. Of course, we will not be paying them anything extra for their increased output. Any workers that don't take up that slack or are incapable of taking up the slack, we will fire them, too, to save additional costs."
 

captaincranky

TechSpot Addict
That's what's always impressed me about Tesla - They've been a self-sustaining company with no background in vehicle production. If they aren't able to find that profitability one of the big auto makers will scoop them up, no doubt.
No, what has sustained Tesla is either the optimism or stupidity of their investors. Tesla stock prices have soared, despite the fact if they they turn a profit for these current quarters, they have lost money over the entire course of their existence. One recent quarter loss was on the order of one quarter billion dollars. (This was while ole' Musk was out modeling his "spacesuit for his Mars colony").

You'll note this is the repeat of the Space-X job cut saga, where Musk gets up and tells you the job cut will help him make more money, and you should thank him for releasing you.

As for the Chinese Tesla factory, Musk has hustled to make that so, ever since the US tax incentives began to dry up.

Oh well, Apple has managed to convince the American public that it's an "American company", maybe Musk with his golden tongue will be able to do the same.

I have noticed that no one here has had a job with Tesla, or Space-X, much less had one which has been eliminated by them. I guess that why they still come off as overenthusiastic sycophant cheerleaders.
 
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petert

TS Evangelist
Then everyone would moan there aren't enough Jobs in America?
Not the shareholders bro - and that is all that matters isn't it? The stakeholders and investors do not care about some random dude in Oklahoma having to pay bills. All those moaners should move abroad in a communist state where the job market is heavily regulated by communist policies.
 

petert

TS Evangelist
[QUOTE="captaincranky, post: 1724800, member: 99521]Oh well, Apple has managed to convince the American public that it's an "American company".[/QUOTE]
They fooled me too to be honest, and I bet the UK public as well. I can't tell otherwise, every clue I have points out that they are Americans
 

captaincranky

TechSpot Addict
Oh well, Apple has managed to convince the American public that it's an "American company".
They fooled me too to be honest, and I bet the UK public as well. I can't tell otherwise, every clue I have points out that they are Americans
It's an American company to the extent that their headquarters is in Cupertino CA. However, virtually all of its product is manufactured in China by Foxconn, which tasks somewhere around 100,000 workers to that end.

Just because Apple has a bunch of stoned drones stumbling into the all glass walls at their new "spaceship complex", doesn't (IMHO at least), make it an American company.

Outsourcing the actual production of goods is so prevalent, it's really rare when you can pick up an item, "device", or tool, with the name of a "proud American company" on it, which doesn't say, "Made in China".

Our corporate entities keep the American corporate names and logos on their product in an attempt to delude American buyers as to its origin, and maintain the public's patriotic fantasies about their product.
 

petert

TS Evangelist
It's an American company to the extent that their headquarters is in Cupertino CA. However, virtually all of its product is manufactured in China by Foxconn, which tasks somewhere around 100,000 workers to that end.

Just because Apple has a bunch of stoned drones stumbling into the all glass walls at their new "spaceship complex", doesn't (IMHO at least), make it an American company.

Outsourcing the actual production of goods is so prevalent, it's really rare when you can pick up an item, "device", or tool, with the name of a "proud American company" on it, which doesn't say, "Made in China".

Our corporate entities keep the American corporate names and logos on their product in an attempt to delude American buyers as to its origin, and maintain the public's patriotic fantasies about their product.
This is wrong on so many levels - looks like you are expecting Apple to abide to some sort of loyalty code towards the US citizens. This obviously at Apple's expense and by delivering inferior products (China is light years ahead in terms of manufacturing at the moment).

Some people might use a strong word for that - socialism or communism. A socialist policy would be to give incentives to companies to make it viable to keep jobs in the country. That means taxpayers are bleeding money to keep jobs in. I don't think it would be practical with Apple - simply put - those jobs are out of US for good.
 

captaincranky

TechSpot Addict
This is wrong on so many levels - looks like you are expecting Apple to abide to some sort of loyalty code towards the US citizens. This obviously at Apple's expense and by delivering inferior products (China is light years ahead in terms of manufacturing at the moment).
Wow, you must be a stock holder. BTW, have they solved the suicide problem at Foxconn's plants? Oh wait, this was on 60 minutes, they put suicide nets around the upper floors of the dormitories where employees were forced to stay.

Corporate greed is the reason those jobs are out of the US. The reason China is "light years ahead if the US in manufacturing ability", is because the US has advisor there showing them how to do it. What we haven'rt shown them, they've stolen,. Apple is also using Ireland as a tax shelter for much of their holdings. (Hint, there's very favorable corporate tax rates there).

I will agree with you on one point, the stoners working at Apple's Cupertino campus, would be less than useless on a Chinese assembly line.

That means taxpayers are bleeding money to keep jobs in. I don't think it would be practical with Apple - simply put - those jobs are out of US for good.
No sh!t Sherlock.

In truth, wouldn't those "taxpayers" you claim to being bled by the "socisalist or communist system", be the jobholders themselves? Another hint, paying taxes on wages earned, pretty much transcends the specific type of government in power.

Do me a big favor and put me on your ignore list. (y) (Y)
 
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petert

TS Evangelist
Wow, you must be a stock holder. BTW, have they solved the suicide problem at Foxconn's plants? Oh wait, this was on 60 minutes, they put suicide nets around the upper floors of the dormitories where employees were forced to stay.

Corporate greed is the reason those jobs are out of the US. The reason China is "light years ahead if the US in manufacturing ability", is because the US has advisor there showing them how to do it. What we haven'rt shown them, they've stolen,. Apple is also using Ireland as a tax shelter for much of their holdings. (Hint, there's very favorable corporate tax rates there).

I will agree with you on one point, the stoners working at Apple's Cupertino campus, would be less than useless on a Chinese assembly line.

No sh!t Sherlock.

In truth, wouldn't those "taxpayers" you claim to being bled by the "socisalist or communist system", be the jobholders themselves? Another hint, paying taxes on wages earned, pretty much transcends the specific type of government in power.

Do me a big favor and put me on your ignore list. (y) (Y)
This is too cute ... trying to come round at people like the pundits on CBS ... a bit insulting a bit of irrelevant references, diversions from the subject ... beating around the bush, never taking responsability for anything ...

Random Apple stockholders are commenting against your posts all the time so that you can serve them precanned opinions you heard elsewhere ... I am afraid I cannot do you a favour, I love reading posts like yours
 

captaincranky

TechSpot Addict
This is too cute ... trying to come round at people like the pundits on CBS ... a bit insulting a bit of irrelevant references, diversions from the subject ... beating around the bush, never taking responsability for anything ...

Random Apple stockholders are commenting against your posts all the time so that you can serve them precanned opinions you heard elsewhere ... I am afraid I cannot do you a favour, I love reading posts like yours
But certainly not as much as you like the sound of your own voice.

Besides how else would you fight pre-canned snippets, catchphrases, and arguments but with pre-canned opinions?

Glad to see you learned how to do an actual quote though since your epic fail @ #16.

Straightening that mess out was 15 minutes of my life wasted I'll never get back.
 
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petert

TS Evangelist
But certainly not as much as you like the sound of your own voice.

Besides how else would you fight pre-canned snippets, catchphrases, and arguments but with pre-canned opinions?

Glad to see you learned how to do an actual quote though since your epic fail @ #16.

Straightening that mess out was 15 minutes of my life wasted I'll never get back.
yeah matey, whatever ... glad you are feeling better now
 

captaincranky

TechSpot Addict
yeah matey, whatever ... glad you are feeling better now
I suddenly feel like I'm in the middle of an "Outback Steakhouse" commercial, there "mate".

I am curious about your user profile though. 329 posts since 2009? That, coupled with your apparently foul mood, tells me you might only join us then things go wrong at home. Or the Internet is spotty in the outback?

Either that, or when the "Empire that the sun has set on a long time ago", passes one more of its massively restrictive self serving laws.

Register absolute ID to view porn? Wow, they're giving the Chinese a repressive run for their money.

I like the no pepper spray too. (y) (Y)

The "no mixed tapes" is kinda fun as well..I read the court transcripts when the court bent over for the copyright lobby.

(Although I have to admit, our Senate bent over for Disney Studios. Now the sun will never set on Mickey Mouse's copyright extension).
 
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mbrowne5061

TS Evangelist
As groundbreaking and revolutionary as their cars are, Tesla still has its strength in software and not cars in general. Maybe they pivot down the road to licensing their tech and software prowess to other premium car brands because the latter have got car first, tech second; Tesla has it the other way around.
I would probably also help if they stopped designing things they could buy from OEMs, and stopped buying things they should be designing. A friend used to work for them and left because they did stupid stuff like design their own door handle and buy their motors.
 
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