
Tesla is laying off ‘about 9%’ of its workforce as it ‘restructures’ the company - whatok
https://electrek.co/2018/06/12/tesla-layoffs-workforce-restructure/
======
jb320
I am waiting for my scheduled HR meeting along with several hundred other co
workers in a few minutes. I am an outside, in-home residential solar
salesperson hired by Tesla long after the Solar City aquisition. I have relied
on the leads generated by the Home Depot employees. I am salaried and most
likely going to get my walking papers today. It is apparent they don't see
value in the proactive approach process to sales.

~~~
aerovistae
Sorry to hear that, man. You going to be alright?

------
stephengillie
> _It means that Tesla could let go over 3,000 employees in this round of
> layoffs._

> _The CEO also confirmed that Tesla didn’t renew its contract with Home Depot
> to sell its energy products at their stores.

Tesla energy advisors were supposed to be at 800 Home Depots across the US
earlier this year._

If they had 3.5 employees per store, and a team of 200 managing the entire
effort, these layoffs could be attributed entirely to the lost Home Depot
deal.

~~~
DiabloD3
I wasn't even aware they HAD a contract.

My local Home Depot has zero mention of any product Tesla makes.

~~~
chasely
I was approached by a Tesla contractor in Home Depot on a few days ago. It was
honestly not a good experience.

For one, I was approached cold. I too had no idea that they had this
agreement, so I was looking at something when someone came up and asked me
something like "what type of project are you working on?" So I naturally just
described what I was doing and before realizing this was not a HD employee.

He asks me if I thought about solar and whatever, but it wasn't relevant to my
situation (roof slope orients E/W at the 45th latitude, so not great for
solar). He goes on his way.

It was just a weird experience. I wasn't in a department related to
electricity or solar, and they had no displays indicating a partnership with
Tesla or that you may be cold-approached by a Tesla employee.

~~~
RankingMember
I still can't believe retail establishments think it's a good idea to degrade
the customer experience by letting third-party salespeople rove their stores.
I know Home Depot et al are making money from it, but I can't imagine there
are many customers coming away with positive feelings from these come-ons.

~~~
ghostly_s
Is this a regional thing? I've never seen any 3rd-party sales staff in a Home
Depot here in Chicago, or anything like this in any other big box store I
frequent.

~~~
Keverw
I’ve seen it here in Ohio. Sams Club and also Menards. Usually some guy at a
aisle or back of the store trying to sell satellite tv. It is annoying...

Just shopping for whatever you needed and some random guy asks what you have
for television.

Also seen a woman trying to sell perfume and wanted to spray some on people at
another store, kinda pushy near where the cash registers are. Aren’t some
people allergic to that stuff? I think it would be better to have samples next
to the actual perfume for when someone is actually shopping for that.

~~~
magduf
>Just shopping for whatever you needed and some random guy asks what you have
for television.

I've had that in Costco, trying to sell me cable TV service. Then they act
completely flabbergasted when I say I don't watch TV and don't care about
cable.

~~~
RankingMember
Haha, I had the same response from a door-to-door cable pusher.

------
danso
Musk tweeted out the layoff email he sent:

[https://twitter.com/elonmusk/status/1006597562156003328](https://twitter.com/elonmusk/status/1006597562156003328)

~~~
swampthinker
Wow, that fake crypto scheme tweet under his official tweet had me fooled for
a second.

~~~
foepys
The fact that Twitter cannot put a single person up to delete a few dozen scam
tweets every time a off celebrity tweets and ban a few accounts speaks volumes
about how much they don't care about their users.

~~~
ironjunkie
Fully agree and that's something I really don't get. Why don't they pay a
small team of 5-10 people that monitors the top 200 accounts, and check if
replies like that happen.

Hacky solution, but it would just work.

~~~
paulddraper
(And FYI, Elon is #87 for followers [https://friendorfollow.com/twitter/most-
followers/](https://friendorfollow.com/twitter/most-followers/))

------
zer00eyz
I wonder if some of this is finalizing the digestion of solar city.

How many accountants, tech, and office workers did the combine company have
that were redundant? Have there been layoffs from the merger (if there were I
missed them) - I'm curious to see if this is the end result of that
combination.

~~~
bduerst
There were some pretty massive layoffs with the merger already, leading into
it, at least according to someone I know who was part of those lay offs.

~~~
apeace
And according to this article:

> After the acquisition of SolarCity, Tesla had another round of layoffs to
> restructure and remove duplicate positions from the acquisition, which
> resulted in about 20% of SolarCity’s workforce being let go.

~~~
zer00eyz
Other than the article I can't find anything that points to redundancy being
the cause:

[https://www.theverge.com/2017/10/25/16545956/tesla-
solarcity...](https://www.theverge.com/2017/10/25/16545956/tesla-solarcity-
layoff-firing-elon-musk)

Is the only other reference that I have found and articles around this time
frame don't make it clear the redundancy was the cause.

------
tim_sw
"Given that Tesla has never made an annual profit in the almost 15 years since
we have existed, profit is obviously not what motivates us."

~~~
greglindahl
Quotes taken out of context are really powerful, aren't they?

------
whatok
Claims no production staff were affected. Don't know the employee breakdown
but imagine production is a huge portion of it. Hard to believe entire other
divisions weren't completely eliminated if production not touched.

~~~
gk1
Given they admitted to over-relying on automation, I doubt they'd be cutting
production staff now. It's not difficult to find 9% of the workforce in other
departments: sales, marketing, operations, engineering, etc.

~~~
jonknee
I think most companies would have a hard time finding 3,500 people to fire and
not have it effect anything. Especially ones that describe themselves as a
"growth company".

~~~
jVinc
Most companies would have a hard time finding that many people to fire because
they weren't that big. Most companies would have no problem finding 1 in 10 to
fire in a downsizing.

------
boznz
They should also sack the execs who made the shitty decision to hire these
guys, being approached by salesmen ruins any shopping experience IMHO and the
whole debacle has probably lowered Tesla's image even more in the eyes of most
people.

~~~
carlivar
That exec was probably the SolarCity CEO at the time, who is Elon Musk's
cousin, so that might be a little awkward.

------
danso
That Home Depot/Powerwall partnership was just announced in February 2018:

[https://www.theverge.com/2018/2/2/16964154/tesla-home-
depot-...](https://www.theverge.com/2018/2/2/16964154/tesla-home-depot-stores-
solarcity-powerwall-solar-panel-roof)

Were home installations ever projected to be a growable part of the company?

~~~
greglindahl
At the start, industrial installations of Power Pack were expected to be 80%
of the battery business, but an alarming number of people outside of Tesla
appeared convinced that retail Power Wall would be the thing. Guess what?

------
dalbasal
Just reading the first few comments.... I really don't get the Tesla hate. Is
it hacker-ish contrarianism? Have they done something? What's the deal HN, why
are we cheering against the home team?

Overall Musk has been pretty straightforward and explicit with what he's
doing.

Tesla (and spacex) set extremely ambitious goals, like none of their
competitors do. They take big risks. They're not interested in reducing risk.
They're interested in a business plan that leads to a mass migration of icbs
to electric (or humans to mars). The nature of ambitious goals is that
sometimes you don't hit your marks. The nature of risk taking is that you
might fail, and have to do fast paced adjustments to recover.

Riskiness also means (literally) that Tesla comes with some chance of total
failure. If they lose two or three big bets in a row, it could be game over.
There are no cash cows or guaranteed income streams. Tesla is not Toyota or
Microsoft. If you own Tesla, you need to be ok with that risk. Don't like it?
Perfectly reasonable. Sell.

Personally (not an investor or customer), I think these companies are awesome.
If GM disappeared tomorrow, nothing that I care about changes. If Tesla
disappears, this could set back electric cars by 5yrs. If McDonald Douglass
rocketry disappears, someone else will launch rockets for the US military.
SpaceX... that hurts our chances of landing people on the other worlds anytime
soon.

None of this risk profile stuff would even be controversial if Tesla was a
fund. A fund manager can be as risky as she likes, provided that's the stated
investment goal. Why doesn't Elon get this amount of rope? .. at least on
hacker news?

Seriously, what has he done to deserve this negativity?

~~~
rayiner
Interestingly, I see this from the exact opposite view. I'm surprised it's
taken this long for the rubber to meet the road. Tesla sells the most electric
vehicles, but it's hardly the sort of delta you describe ("extremely ambitious
goals, like none of their competitors do"). Nissan and Tesla both hit the
300,000 car mark in January/February of 2018. And let's not forget the recent
NTSB report, which revealed that "Autopilot" is just a better-marketed version
of the lane-keeping everyone else is doing.

As to SpaceX--it's an extremely interesting attempt to tread a well-worn path.
Commercial exploitation of space travel is a really neat concept. But again
your comparison is completely unmoored from reality. SpaceX disappearing will
"hurt our changes of landing people on other worlds anytime soon?" Who exactly
do you think got us into space, then to the moon? Who is responsible for
almost all the progress in space exploration to date, including developing the
RP-1 based rocket designs that SpaceX is refining half a century later? It was
U.S. defense contractors! It's worth keeping in mind that the Saturn V
developed by Boeing/NAA/Douglas _in the 1960s_ could hurl three times as much
weight to the moon as the Falcon Heavy. To date, the only _proven_ model for
treading _new ground_ in space is large defense contractors spending gobs of
State money.

The real question is: why does Tesla/SpaceX generate so much sophomoric
positivity?

~~~
lutorm
_the Saturn V developed by Boeing /NAA/Douglas in the 1960s could hurl three
times as much weight to the moon as the Falcon Heavy_

True. At more than an order of magnitude higher cost.

~~~
rayiner
Achieving an order of magnitude cost reduction for proven technology is
impressive, even given the intervening half century of progress. But similar
achievements are routinely made in other industries. It doesn’t justify the
breathless fanboyism Space X engenders.

~~~
lutorm
Maybe because people think space is cool and there's been close to zero
progress for decades before they came along? Or maybe because the goal is
something more than just making money, something that clearly set them apart
from the other entities in the field, at least when they started.

~~~
frgtpsswrdlame
>Or maybe because the goal is something more than just making money

Maybe they view their payoff date in a longer term fashion, maybe the way they
will make their money is 'cool' but Space X isn't more charitable than any
other company.

~~~
lutorm
Unless you have unique insight into Elon's mind, I don't see how you have any
idea about that.

------
ttul
A 9% adjustment isn’t bad against a business that is running as hot as
Tesla...

~~~
jonknee
Are they running hot? They're in serious financial trouble and have been
unable to meet self-imposed production levels. Now they're laying off
thousands of people.

~~~
nickik
They are not in financial trouble. Most people are only skeptical if they can
do it without raising capital.

However everybody agrees that they both have many costumers waiting and would
be able to raise capital.

Nobody believes that Tesla is in real real serious troupe.

~~~
Analemma_
> They are not in financial trouble. Most people are only skeptical if they
> can do it without raising capital.

Take a few minutes and read [https://priceonomics.com/porsche-the-hedge-fund-
that-also-ma...](https://priceonomics.com/porsche-the-hedge-fund-that-also-
made-cars/). The moral of that story was, if you're "fine as long as you can
raise capital", then you're actually in a very precarious position. And it was
even another luxury car company to boot!

Not that Tesla is making the same speculative financial shenanigans that
Porsche was, but the point is, access to capital has a tendency to dry up
right when you need it most. If there's a recession in the next 18-24 months
(which, glancing at yield curves, is looking increasingly likely) and lending
tightens up, Tesla might not find it as easy as you think to raise capital
right when they need it to avoid running out of money.

~~~
ttul
And Tim Cook is waiting for that moment to arrive, so that he can put an apple
on every Tesla.

------
hi41
Why is Tesla doing this? It is riding high on the success of its electric cars
and Elon Musk is so famous and is considered a visionary.

------
mlthoughts2018
Friendly PSA: always negotiate severance. Companies can always be forced to
restructure like this or even just choose to on a whim. Pressure from the
board, hiring a new CTO who wants to bring in his or her own people, etc. etc.

Always make sure you are happy with what type of offsetting compensation
you’ll receive in this eventuality _before_ taking the job, and consider it a
huge timesaver if an employer passes on you because you asked to negotiate a
competitive severance package.

~~~
organsnyder
Easy to say for those of us with highly-demanded skillsets. My hunch is that a
large portion of that 9% didn't have that luxury.

~~~
craig1f
Looks like the 9% were mostly management in redundant roles, not production.

100% of the articles I have read about Tesla have been completely fabricated
hit-pieces, or like this one, completely misleading. I think that at this
point, they deserve the benefit of the doubt unless you're willing to actually
read the article.

~~~
Spooky23
How is it misleading?

They purged contractors not long ago and are now laying off lots of people.
Those are facts.

They reported that "production associates" are unaffected by the layoffs --
which doesn't mean that people working in production aren't impacted. It just
means that they aren't laying off hourly employees in production. The
editorial at the bottom of the article rationalizes the decision and reflects
that it is ultimately good for the company.

IMO, it was a pretty balanced article that delivered potentially bad news in a
fair way.

~~~
craig1f
Misleading in that, when you hear layoffs, you immediately think "financial
trouble" because that's usually the context that you hear about layoffs.

These articles you hear about Tesla are sometimes factual, but they're not
published because they're factual. They're published to do damage and affect
stock prices in a way that make specific people rich. It's the equivalent of
playing poker, and affecting your neighbor's hand by distracting the dealer.

Every week there's a god damn article about Elon's "fall from grace" (what?)
or about how he's trying to prevent unionization (you mean the fake unions
that Ford has been trying to start, but workers aren't interested in?) or
about subsidies (which are still a fraction of oil subsidies).

As a result, he made the mistake of criticizing the ethics of the media. So
start expecting him to get the Gamer-gate treatment as the media pile on him
even harder than before with fabricated news.

Every time I read a negative piece about Elon or Tesla, I worry "oh shit, is
this the one?" and I look into the article and it's absolute bullshit. At this
point, even if I read an article and it appears to be factual, I'd say the
burden of proof is on the naysayers, and not on Musk or Tesla, given past
performance.

~~~
Spooky23
You think "financial trouble" in this case because there is plenty of it.
Tesla is a company with 6 months to either get cash or become insolvent.

Elon Musk is an amazing innovator and amazing PR guy. Few people can turn an
idea into reality as well. But... he's running a high risk business whose rich
valuation can go poof at any time. Because his personal name is inseparable
from the firm, he's going to get heat for it.

The financial press has an obligation to talk about this stuff. Investors
deserve to be informed.

------
myrandomcomment
Still waiting for my site visit for the $1000 I put down a very long time ago
for my solar roof.

------
riantogo
Somewhere along the way I have come to appreciate that as a society we need to
optimize better for psychological, financial and physical wellbeing of people
prioritized by proximity: employees, community, humanity. It will definitely
slow down innovation. We might go to Mars 20yrs late, no self driving cars for
10 more yrs, walk around the city some more before electric scooter land etc.

Of course it is in conflict with innovations in humanity impacting products
like cure for cancer, malaria etc. It would be nice to figure out a solution
that provides a good balance.

~~~
ManFromUranus
>It will definitely slow down innovation

It will definitely slow down innovation. Some projects / aspirations will come
off the table completely. Mars? Forget about it. All your mars money will be
treating AIDS/Malaria/Cancer/Whatever. All NASA and space exploration money
will go to feeding poor people and refugees and all manner of charitable
causes, these causes will only ever multiply ad infinitum. I think there is
really only money for one or the other. You can have a comfy easy welfare
state life, or you can explore and reach for the stars.

You can't do discount Mars, or space exploration on the cheap, you basically
can't have both. Your welfare state will make it so that you don't ever really
have enough money to actually do any kind of space exploration. Sure you can
send cheap drones locally within the solar system, but that's all space
exploration will ever be from now on.

~~~
chillingeffect
Maybe instead of NASA, the money could come from the war budget instead? [1]

[1] [http://www.newsweek.com/how-many-trillions-war-has-cost-
us-t...](http://www.newsweek.com/how-many-trillions-war-has-cost-us-
taxpayer-911-attacks-705041)

~~~
ManFromUranus
That won't happen. I don't think 'regime change' is going to come off the
foreign policy menu, nor is paying back all the debt that is owed. So the
space money is going to be eaten by debt payments and more 'regime change'
initiatives around the world. I forgot all about foreign policy, I thought
there would be no money before, now i KNOW there will be no money for any of
that.

------
_Codemonkeyism
Again?

------
IBM
This is definitely the move of a company in the process of scaling up
production of their mass market vehicle that their valuation hinges on.
Definitely not about managing cash flow.

~~~
gowld
There's no need for sarcasm. Have confidence in yourself that you can speak
plainly and the import of your comment will be undesrtand.

~~~
RivieraKid
I appreciate the sarcasm, adds spice to the discussion. Nothing to do with
confidence, that's just your attempt at putting the guy down.

------
stevievee
Tesla and SpaceX are businesses and I never understood the public fandom
behind them and Elon Musk. 3,500+ people losing their jobs is pretty
significant for a leader who touts altruism as one of his top motivators.

~~~
jblow
You are not going to count all the jobs he created in the first place, and the
years of gainful employment those 3500 people had? It’s just all negative in
your estimation?

~~~
stevievee
What an oversimplification of my comment. I'll oversimplify it for you so you
can't misinterpret it: "This decision he just made is poor and Elon is human
just like everyone else"

~~~
djrogers
> "This decision he just made is poor and Elon is human just like everyone
> else"

How on earth could you _possibly_ know that? It's entirely possible (likely)
that not laying off those 3000 people would endanger the ability of Tesla to
continue employing the other 30,000 people. Life (and business) is sometimes
messy...

~~~
stevievee
No, the company has been operating in the red forever. He is bowing to the
public markets to make the company's life easier. It was never going to die if
he kept these employees.

~~~
btilly
Those same public markets were recently trading at 87-88 cents on the dollar.
(See [http://markets.businessinsider.com/bonds/tesla_incdl-
notes_2...](http://markets.businessinsider.com/bonds/tesla_incdl-
notes_201717-25_regs-bond-2025-usu8810laa18) for verification.)

If the markets were assuming that they would recover half of what was owed in
bankruptcy, that corresponds to about 1/4 odds of bankruptcy in the next few
years. Given that historically markets have been more accurate than any
individual commenter, the risk of bankruptcy was quite real. No matter how
many Monday morning quarterbacks like you think otherwise.

~~~
stevievee
Sorry, to clarify I am talking equity. Please provide examples now.

The snark in this thread is unbelievable.

~~~
btilly
Here is a quick explanation of how markets work, and why equity is the wrong
thing to look at to answer the question asked.

Equity prices give you a share in future success. They therefore predict
expected future value, pro-rated by the odds of getting there.

Bonds give you back money if the company remains in business, and nothing
more. Therefore they represent a prediction of odds of going out of business,
with no regard to how wonderful the possible upside in the company might be.

Tesla's combination of high equity value and low bond value represents a
company that has a real chance of becoming dominant in its sector, and also a
good chance of cratering instead. You shouldn't invest in a company like that
unless you understand why there is a real risk, and are willing to take it.

------
akshayB
Tesla's market cap is $55B

If you do a quick math let's say they sold 400,000 Tesla (which they haven't
yet) at an average of $100,000 each (which is probably lower) its net worth
comes around $44B. I feel like company is way over valued and there is lot of
fluff in the evaluation.

~~~
dragontamer
That's not how people typically evaluate companies.

The "standard" way to evaluate a company is to take the price of the stock,
and divide by the profits. There are some details like "historical PE" vs
"forward-looking PE", but that's the basic metric.

The PE ratio represents the number of years it'd take for a company to make
back the price you paid. And for most people, PE of 15 to 25 (15 years to 25
years of profits) to make back their market-cap is reasonable. Some companies
like Amazon have PE-ratios over 100, as they're considered to be in "growth
mode".

Tesla never has made a profit however, so its PE ratio is negative, at least
historically. So evaluations are most likely based on expectations of future
profits. Assuming Tesla is "worth it" at $55 Billion market cap or so, then
Tesla needs $2.2 billion of consistent PROFIT / year (not revenue) to get to
~25 PE ratio.

Anyway, that's analysis from just one metric. There are other metrics out
there, but I think PE ratio is the most common, and one of the simpler metrics
to understand.

~~~
qaq
if you can just invest based on simple metrics like that it would be very easy
to make money in the market.

~~~
dragontamer
I'm not saying "invest in simple metrics". I'm explaining how a typical
evaluation is done. The original poster's evaluation is fundamentally
nonsense.

> If you do a quick math let's say they sold 400,000 Tesla (which they haven't
> yet) at an average of $100,000 each (which is probably lower) its net worth
> comes around $44B.

This line just doesn't make sense at all. There's no metric I'm aware of that
matches this methodology.

~~~
stephengillie
The original poster appears to be confusing revenue and profit. Also, the math
is imprecise or incorrect - 400,000 cars sold at $100,000 each would be $40
billion.

In lieu of profits, is there any way to use revenue to estimate a company's
valuation?

Tesla has $28.6 billion in assets, according to NASDAQ[0], yet their market
cap is nearly twice that. Is that a normal ratio?

[0]
[https://www.nasdaq.com/symbol/tsla/financials?query=balance-...](https://www.nasdaq.com/symbol/tsla/financials?query=balance-
sheet)

~~~
dragontamer
> Tesla has $28.6 billion in assets, according to NASDAQ[0], yet their market
> cap is nearly twice that. Is that a normal ratio?

No. Ford has $257 billion in assets for example but a smaller market cap than
Tesla.

One could argue that "Market cap" is a poor metric of size and that
"Enterprise Value" is better. Teslas numbers move in the right direction if
you're looking at Enterprise Value, but its still kinda bad in terms of
classical evaluation.

\---------

Ultimately, the only way you square the round-hole of Tesla's balance sheet is
imagining future earnings, future assets, and future growth. Alternatively,
you invest because you believe in the cause and not because you plan to make
money in the stock. Arguably irrational. But the world isn't really about
money. I generally respect people who make that kind of decision, as long as
they don't become an annoying fanboy.

~~~
qaq
Ford also has $222 billion in liabilities

~~~
dragontamer
Note that enterprise value takes into account liabilities. Which is why I
mentioned it.

Also note that of Tesla's $28 Billion in assets, Tesla has $24-billion in
liabilities. So the company is overall +$4 Billion in assets, while Ford is
+$35 Billion in assets.

So Ford is 9x bigger than Tesla by assets, and is also 9x bigger by (Assets -
Liabilities). In either case, the metric suggests that Ford should be bigger
than Tesla, and yet both Tesla's market cap AND enterprise value is larger.

Clearly, no one investing cares about Tesla's current size relative to Ford.
At best, people are speculating on Tesla's future growth.

~~~
qaq
I personally just want transition to electric cars to happen faster so my
small investment in TSLA I pretty much consider to be a charitable donation to
a worthy cause :).

------
philwelch
In other words, Tesla is being approximately, literally decimated:
[https://en.wikipedia.org/wiki/Decimation_(Roman_army)](https://en.wikipedia.org/wiki/Decimation_\(Roman_army\))

~~~
neolefty
Except that it's not random, noone is being killed, and they are getting
severance and stock vesting.

~~~
r00fus
And - Musk said something about allowing them to move to other groups.

------
tempaccnt123
I'm sure this is at least partly tied-in to their ongoing, illegal efforts to
crush labor organizing at their plants.

[https://www.reuters.com/article/us-tesla-nlrb/worker-
testifi...](https://www.reuters.com/article/us-tesla-nlrb/worker-testifies-
that-tesla-stopped-him-from-organizing-union-idUSKBN1J803Z)

~~~
icelancer
>> illegal efforts

Yet to be determined by a court. Precision in language is important, no matter
how heated you are about a situation.

~~~
snackbugs
This itself seems like an imprecise argument. If there are well-known laws
against doing something that has gone unpunished so far, is it then legal?

~~~
logfromblammo
It is illegal to trespass, but you can also acquire the property you trespass
upon by adverse possession.

If you can trespass for 20 years (varies by jurisdiction) without getting
ejected, it's legal. And you now own the property.

If you don't enforce a trademark, it is void. There are statutes of
limitations on a lot of crimes and torts, including those involving violence.
So there is quite a lot of precedent involved in unenforced, flagrantly-
violated laws becoming void.

One way around that is to elect government attorneys that will prosecute those
laws, and government cops that will investigate suspected violations of those
laws.

