
Tesla fires hundreds from headquarters, factory - fmihaila
http://www.mercurynews.com/2017/10/13/4819750/
======
Animats
High-level executives at Tesla are bailing out. Back when Musk announced his
overoptimistic production schedule for the Model 3, his two top production
executives quit.[1] Nine more high-level executives have left so far this
year.[2]

[1] [https://www.bloomberg.com/news/articles/2016-05-04/two-
tesla...](https://www.bloomberg.com/news/articles/2016-05-04/two-tesla-
production-chiefs-to-leave-ahead-of-biggest-challenge-yet) [2]
[https://www.bizjournals.com/sanjose/news/2017/08/02/tesla-
ts...](https://www.bizjournals.com/sanjose/news/2017/08/02/tesla-tsla-
executive-exodus-kurt-kelty-battery.html)

~~~
sien
That's really interesting. The Economist ran a story earlier about how
aggressive Musk's finances are and how there was weird finance going on and
that Musk was simultaneously trying to keep things afloat, keep on a super
aggressive schedule and keep control.

[https://www.economist.com/news/business/21709061-entrepreneu...](https://www.economist.com/news/business/21709061-entrepreneurs-
finances-are-jaw-dropping-inventive-and-combustible-his-space)

Perhaps the wheels are starting to come off. Even if they do, it's been
amazing what has been achieved.

~~~
agumonkey
From afar, it seems that's just how musk did about everything. SpaceX was a
potential catastrophy, but they passed the tipping point successfully.
Everything Musk does is "adventure" like, which is unsurprisingly good for
employee stability. It's a bit like Jobs at Apple. You're gonna suffer, maybe
get fire but you worked on "that" project.

------
dmode
I know someone who just got fired in this round at Tesla. His manager never
communicated to him that he was a bad performer. He was not on a PIP or any
performance plans. He was also working on Model 3. One fine morning his
manager called him and said this would be his last day. He is a single income
earner and was so shocked by this news that he is getting borderline
depressed. They offered only 2 weeks of severance.

~~~
metaphor
> I know someone who just got fired in this round at Tesla. ... They offered
> only 2 weeks of severance.

Fired or layed off? I've never experienced either, but I always thought
severance pay was exclusive to the latter.

~~~
analog31
If you're fired for doing something bad, then you become ineligible for
unemployment compensation (which is something you earned) and some other
benefits. This creates a perverse incentive to claim a cause for termination.
On the other hand, it also creates an incentive for the fired employee to sue,
especially if they think that the employer didn't have an utterly bulletproof
paper trail and discipline procedures.

For this reason, it's sometimes more practical for a company to terminate
someone without cause, and just pay out the benefits as a cost of doing
business. They can wait for a slow season, when they would normally shed some
workers, and terminate the lowest performers.

Companies avoid the term "layoff" because it has connotations, such as
eligibility to be re-hired when conditions improve. So they use "reduction in
force" instead. The people who are fired are "impacted," and so forth.

The terminology used doesn't mean anything... what matters is whether someone
was terminated "with cause" or not.

~~~
noitsnot
It varies by state, but you can collect unemployment a lot of the time if you
have been fired.

~~~
tyingq
In California, unemployment is a maximum of $450 a week for 26 weeks. Still
helpful, but ~$11/hour is a pretty big drop for most of them.

~~~
analog31
Indeed, it's not a lot, but I figure, you earned it so you might as well
collect it.

------
Steeeve
I'm not a fan of this style of management at all. I won't knowingly go to work
for a company that behaves in this manner. I've read that Netflix does it, and
I've seen inferences that they acquired the practice from Disney.

If you have a low performing employee that you want to get rid of, fine.
Arbitrarily destroying the lives of a percentage of your workforce in an
annual purge is not OK.

People always seem to put Musk on a pedestal. Personally, I've always been
(and always will be) leery of a company run by a PayPal founder.

~~~
throwingerman
And it is exactly this style of management that is causing problems at the
German automation plant he aquired (see my comment in the duplicate thread).
It is probably a reason why production of the Model 3 is behind -- the company
he acquired builds the factory robots needed for advanced automation. Smart
move to acquire it then and it explains why the timing is now off.

You can't run a German plant like an American one, people will take the 30 day
vacations that have been written into their contracts since before he arrived
(just because you have a new boss doesn't mean the old contract is invalid),
take sick days if they need them (unlimited sick days by law, they don't come
out of your vacation time), and go home at 5pm because they value their
home/family/free time. Last I checked the factory had at least dozens of
positions open that they can't fill because no one here wants to work for
them.

~~~
spatulon
Presumably one bit of Tesla culture they can't bring to Germany is firing low
performers.

I worked for a German company for over a decade. I don't know if it was due to
their culture or their laws, but I never saw anyone get fired for poor
performance (except for failing the initial 6-month probation after joining).
And it's not like we didn't have low performers — once I got into management
it became quite clear that there were a handful of people who were borderline
useless, but it was just accepted that they were employees, that the company
should look after them just the same, and find work for them to do.

~~~
Someone
The idea in large parts of western europe is that it is OK to fire employees
who aren’t fit for their job, but that “low performing”, at best, only is a
low quality indicator of the former.

For example, management can stifle productivity in ways that individual
workers have little influence on.

Also, employees may be ‘useless’ for a while, but then improve again, for
example if they are going through a divorce, the death of a relative, etc.
Firing people because they perform worse for a few months is frowned upon in
some circles.

~~~
hyperpape
How do people there understand the difference between low performers and
people who aren't fit for their job? The latter has the sound of something
lasting that cannot be fixed, but I'm wondering how it plays out in practice.
How do you determine that someone is not fit for their job as opposed to a
mere low performer?

~~~
throwawayknecht
By discussing things with them like a regular human being and giving them
opportunities to try things they are more comfortable with.

Good management is not, ironically, rocket science.

~~~
hyperpape
I think this comment is the 'RTFM' of employee-employer relations.

Very few things in this world are actually simple enough that this kind of
dismissive attitude works. I've seen people who didn't care about giving
helpful feedback and second chances, but I've also seen people who agree in
spirit, but don't know how to do it well.

------
wpietri
Do other companies do this? Unless this is GE-style force ranking, I've never
heard of it.

If somebody isn't performing well, I have no idea why I'd wait up to a year to
deal with it. And it seems terrible for morale (and PR) to have a regular
event where a bunch of people will be let go in one block.

~~~
emodendroket
> Tesla said the performance-based departures were not considered layoffs and
> not subject to state notifications. It also said the moves have generally
> boosted worker morale, as high-performing employees have been rewarded.

Maybe I'm just paranoid but this part kind of smells to me.

~~~
brianwawok
One of my best momemts at bigco was a useless middle manager getting fired.
Bad and toxic employees do kill morale for your team.

~~~
wpietri
Sure. But then why keep them around for up to a year and fire them in bulk?
The moment to get rid of a bad employee is as soon as you notice you have a
bad employee.

The distribution of noticing problems should be pretty much random, so
concentrating the firings in a once-a-year block means a high tolerance for
keeping bad employees around. That, or they got rid of these people for
reasons not really related to performance.

------
SeanDav
This sort of behaviour is quite common in companies, so I can't help wondering
if it is true that studies have shown a significant percentage of Silicon
Valley CEO's and company executives are psychopaths.

[https://www.cnbc.com/2017/03/21/apparently-psychopaths-
make-...](https://www.cnbc.com/2017/03/21/apparently-psychopaths-make-good-
ceos.html)

[https://www.theguardian.com/technology/2017/mar/15/silicon-v...](https://www.theguardian.com/technology/2017/mar/15/silicon-
valley-psychopath-ceo-sxsw-panel)

[https://en.wikipedia.org/wiki/Psychopathy_in_the_workplace](https://en.wikipedia.org/wiki/Psychopathy_in_the_workplace)

[https://www.washingtonpost.com/news/on-small-
business/wp/201...](https://www.washingtonpost.com/news/on-small-
business/wp/2016/09/16/gene-marks-21-percent-of-ceos-are-psychopaths-
only-21-percent/)

~~~
JabavuAdams
Why would they have to be psychopaths to justify such behaviour? A belief that
the project > people suffices. Can you not think of any project that is more
important than the individual workers making it happen?

Also, I suspect they would react differently if e.g. the mass-laid-off
committed mass suicide, whereas I doubt a psychopath would.

------
tbabb
The high estimate was 700 fired. Out of 33,000, that's 2%. Culling the bottom
2% performers seems like a reasonable (even healthy) thing to do; not really
an upheaval.

~~~
tbabb
EDIT: Not healthy, though, if that 2% is a quota, rather than the happenstance
fraction of people who fall below the performance bar at evaluation time.

------
kryptiskt
The unforgivable action here is the badmouthing of the workers that they
fired, gloating about increased morale. Not even Uber would sink that low.

This crap from management shouldn't be tolerated, much less celebrated.

~~~
TStowe
That tends to be one cheap option to keep psychologically tied to the company.

I'm not for or against it, but I imagine being one of those workers it would
suck.

Still, I'm all for automating as much as possible, and in the case of
workforce reductions, gloating over the fact that things move so much more
quickly and accurately.

I do like Elon Musks's attitude toward people wasting time. And this is head
and shoulders above what goes on in China, India factory conditions. Not
saying no one should whine and bitch and moan about it, but truly, it's not
all that bad.

------
rdlecler1
Hiring managers are going to remember this. I hope that it was performance
related and that Tesla wasn’t just trying to save face with investors.

------
mc32
Man, that's rough. I know there is good reason to get rid of dead weight, but
two things:

1\. I had no idea dead weight would be allowed to exist at Tesla.

2\. I believe dead weight can be redeemable, if you put in the right effort
--not the procedural PIP stuff (which is about improvement as much as
incarceration is about rehabilitation) but I mean real effort to rehabilitate
a worker. Maybe too much effort for a high flying co.

~~~
tedsanders
Not to waste time pointing out what you already know, but I think it's worth
adding that you can be fired without being dead weight. Many firms (especially
in law or consulting) have chosen to have pyramid structures with up-or-out
policies that fire half the employees every two years. Even if the fired
employees are good, this keeps everyone motivated and allows you to churn
through employees to find the really excellent ones worth developing. The
system is not inherently good or bad, as long as all parties are aware of it.

~~~
Analemma_
> Even if the fired employees are good, this keeps everyone motivated and
> allows you to churn through employees to find the really excellent ones
> worth developing. The system is not inherently good or bad, as long as all
> parties are aware of it.

Everything about these statements is wrong. Take it from someone who worked at
Microsoft before and after they finally smartened up and ditched stack
ranking: it's horrible. It creates an atmosphere of paranoia, where people
sabotage each other at great cost to the company instead of working together
towards common goals. Worse, contra your claim that it weeds out the worst and
lets the best rise to the top, what actually happens is the best quickly get
sick of the bullshit and leave, while the ones rising to the top are the ones
most adept at politics and gaming the system.

Stack ranking has no redeeming qualities whatsoever, and if that's really what
Tesla is doing it's enough alone to make me more bearish on them. It's that
bad.

~~~
tedsanders
The top three management consulting firms are ranked #1, #3, and #11 on
Glassdoor's best places to work. Clearly their up-or-out policies aren't seen
as horrible by their own employees. And as a consultant who works at one of
those firms, I've never seen anyone sabotage someone else's performance, not
once. In fact, you are probably rated best when you help support those around
you. Certainly the policy causes stress, but these firms are top destinations
for MBAs regardless.

[https://www.glassdoor.com/Award/Best-Places-to-Work-
LST_KQ0,...](https://www.glassdoor.com/Award/Best-Places-to-Work-
LST_KQ0,19.htm)

~~~
semi-extrinsic
People with MBAs have a very different mindset from auto workers. When you've
had "this is an optimal system" drilled into your head at school by people
you've been told are very smart and you should look up to, you're probably
going to think it's a good system. Especially when you know that the
probability of harsh financial consequences for yourself and your family from
this policy is essentially zero.

The situation for auto workers is very different on both points.

------
throwingerman
Interesting comments can also be found here:
[https://news.ycombinator.com/item?id=15470314](https://news.ycombinator.com/item?id=15470314)

------
CrLf
The Romans called this style of management "decimation." It's unfortunate that
it's still fashionable in the 21st century.

Also, this sounds straight out of the Ministry of Peace:

"It also said the moves have generally boosted worker morale"

~~~
jaclaz
>The Romans called this style of management "decimation."

To be fair to the Romans, decimation was a (correct, if the adjective can be
used in this case) _random_ process and was limited to the army.

The idea was that when a large group (a cohort or 480 people) _severely_
underperformed (it happened in case of rebellion/mutiny or blatant cowardy),
AFTER having executed on the spot those that led the rebellion or that were
manifestly coward or leading the mutiny, the remaining were divided in groups
of ten, then in each group one was selected by drawing lots, and was executed
by the remaining 9 comrades.

This had two advantages (in the eye of the Roman leaders), the army would not
have been exterminated (unlike in more "traditional" repression of rebellions)
and the 9/10 remaining would have been _motivated_ to contribute to the group.

So, there was not an evaluation of the performance (or non-performance) of the
single, the responsability was attributed to the group as a whole, and then
out of the 10 people subset the 1 to be killed was chosen by Fate.

------
praulv
I used to be of the opinion that a company should have full right to drop dead
weight as and when it chooses fit. The thing we forget is we, citizens, pay
extortionate taxes to run a government which provides favourable incentives
for companies to form and provide employment. They should, in return, be
obliged to demonstrate some level of mutual benefit to employees, rather than
purely incentivising shareholders' and directors' bonuses.

~~~
nopzor
So companies should follow the law? I think you're really arguing for better
employee protection in the USA ?

~~~
penguinUzer
I interpreted the post as meaning when a company is given millions of dollars
in tax breaks, i.e., build your new factory here and your income tax is abated
for X years, then they should be on the hook for when they let go of
employees.

In theory I agree and the company should be on the hook to provide training or
assistance.

~~~
nopzor
So why weren't employee protection or training part of the tax break? Same
point.

~~~
Joky
Why would everyone's taxes be used to protect a few workers? Especially
(apparently) not the greatest... If the company is doing well it'll continue
to hire and provide employment to others. As a society, I believe we could
argue that we shouldn't subsidize companies that offshore the work, but
otherwise if we want help for employees that are let go (training, assistance,
...) better make it a public service.

------
xedarius
It's quite common in investment banking. A bunch of them do it.

[https://www.quora.com/Could-Goldman-Sachs-strategy-of-
firing...](https://www.quora.com/Could-Goldman-Sachs-strategy-of-firing-the-
bottom-5-10-of-staff-every-year-work-for-all-businesses)

I think Barclays also used to do it.

It's shitty thing to do to people. But you don't need me to tell you they're
shitty companies.

------
carlossilva33
Wouldn't be surprised if this is to distract people from bad publicity such as
production delays and handmaking of parts
[https://www.wsj.com/articles/behind-teslas-production-
delays...](https://www.wsj.com/articles/behind-teslas-production-delays-parts-
of-model-3-were-being-made-by-hand-1507321057)

------
spectrum1234
2 key sentences in the article say so much: "Several said Model X, Model S and
former SolarCity operations seemed to be targeted." ... "The spokesman said
most of the dismissals were administrative and sales positions, and outside of
manufacturing."

This has little to do with performance or any conspiracies. If your output of
products is about to dramatically shift there is no reason to think employment
should remain stable among all departments. I would guess if shifting a
company's labor requirements was more politically correct, the shift would be
much larger.

The average pundits head might just explode trying to rationalize the
juxtaposition of a clean tech company increasing production rapidly yet
'firing' hundreds. The rational, however, applaud these efforts and the
difficult decisions this requires.

~~~
mankash666
Flawed assumption being presented as logic here. The only logical reason for
firing would be if the model S,X skills were completely irrelevant to whatever
the new model is - which is unlikely.

~~~
extrapickles
It seems to me that the firings were probably more in the sales side. They
have had problems with sales people who refused to do things the ‘Tesla Way’
by either being pushy, or by offering discounts to make their numbers look
better.

------
nstj
There seems to be some confusion/ambiguity around whether these layoffs were
focused on the Fremont Tesla factory or company wide.

If they were focused on 1 factory that would be weird - if they were company
wide that would be within the bounds of normalcy.

Can anyone illuminate?

------
ape4
Its like the "Survivor" TV show. Or "The Apprentice" \- hey who was the host
of that?

------
thegayngler
So basically what you have is Musk over promising and under delivering but
it's the worker's fault he could not meet unrealistic deadlines he set himself
ignoring all reality.

Musk set Tesla up for failure and now the non-management people have to suffer
as a result. The fact that this is even being talked about right now may hurt
Tesla's chances of hiring great future employees...especially with that
scathing article basically saying they were being fired for bad performance
and not laid off.

Can you still get unemployment if you are fired for unsatisfactory
performance?

