
Tesla reviewing contractors, firing everyone not vouched for by an employee - WalterSear
https://electrek.co/2018/05/06/tesla-brutal-review-contractors-firing-vouching-employee/#disqus_thread
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lsc
Sounds shocking... but having worked as a contractor for a goodly portion of
my career, I'd argue that something is seriously wrong if you can't get at
least one employee to vouch for you.

Really, every place I've worked, you could say this happens every month;
almost always I've needed an employee to sign off on my hours, either the
person I report to or the person they report to. I always took that as a vote
of confidence, personally.

(I mean, obviously, even if I get fired, I expect to get paid for hours
worked, but point being, the guy just signed off on spending $15k-$20K,
depending on the body shop cut, for a month of my work, I'd assume that would
trigger at least a few minutes of "what did Luke do for me this month?" and a
phone call letting me know not to come in Monday if the answer was "Not
much".)

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WalterSear
> I'd argue that something is seriously wrong if you can't get at least one
> employee to vouch for you.

The corollary to that is that if you get to the point where you need to check
on the vouchsafety of all your contractors - en masse - something is seriously
wrong with your company.

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sjwright
I think Elon was pretty clear that he considers the situation to be seriously
wrong, hence the extreme approach. It's a refreshing attitude; this sort of
problem is common in most large companies.

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ryguytilidie
Yeah, a startup founder seeing a problem and having a clumsy, heavy handed,
poorly thought out reaction is super refreshing. Hadn't been this refreshed
since like, Friday.

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mygo
you know he founded PayPal, right?

Which sold to eBay for $1.5b

His first company was acquired by Compaq for almost half a billion.

He’s listed by Forbes as one of the top 25 most powerful people on earth.

Tesla is a 15 year old company.

I feel like “startup founder” should not the operating phrase here.

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zimpenfish
Not to diminish his achievements but...

> you know he founded PayPal, right?

Confinity (Levchin, Thiel, Nosek, no Musk) launched PayPal in late 1999. X.com
(founded by Musk) merged with Confinity in March 2000. In no way can Musk be
considered a "founder" of PayPal.

> His first company was acquired by Compaq for almost half a billion.

Zip2? $340M. Nowhere near half a billion and that was in 1999 at the height of
the _ridiculous_ tech bubble.

The man's done a lot of stuff - there's no need to embellish them.

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WaylonKenning
In the race for attention, is this article interesting because it's a new
model for implementing and delegating work, or more the fact that a company
has decided to rapidly cut down on contractors?

Because there's lots of companies that rapidly cut down on contractors, and I
doubt they'd all have an article written about them at the top of Hacker News.

I'm neither here nor there about the company, but I note that it competes for
a lot of my attention. I feel like if they decided to switch to all Macs, or
abandoned Slack for IRC, I'd see a story about it here on Hacker News.

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aerovistae
Exactly.

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ryandvm
As a contractor myself, this sounds like a great idea. If there aren't
multiple people at an organization that can vouch for you, there's a good
chance you're dead weight - or at any rate, there are no checks in place to
prevent you from becoming so.

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foxyv
My Dad liked to tell a story. The parts of the body were arguing about which
was most important. The heart pumps the blood, the brain keeps everything
working together, the lungs bring in air etc... Then the anus closed up!

Even if no one vouches for the butt hole in department C they can still be
necessary. Something to keep in mind before making sweeping changes without
regards to the details.

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gpmcadam
Meta: can you not link to the Disqus deeplink on the page?

    
    
        https://electrek.co/2018/0...ployee/#disqus_thread

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olliej
The bigger concern I have is that it encourages extreme nepotism — people
vouch for people from their schools and prior jobs, and so risks introducing
systemic bias against people from different backgrounds. Obviously gender and
race are heavily represented in this kind of thing, but even basic stuff like
west coast vs east university nonsense can start happening.

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zamalek
Your own reputation is put on the line by vouching for a contractor, according
to the article. So if something bad happens down the line, your continued
engagement with Tesla will be questioned too.

Nepotism and bribes are _going_ to happen, but I think there will be some fast
lessons when Tesla axes employees for this behavior.

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watwut
Which is exactly the situation when friends and former classmates get more
advantage over someone you know for three months.

It makes it more clicky.

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chasd00
He's probably talking about consultants. I'm sure Accenture, Deloitte, and
McKinsey (among others) infections have run rampant in just about all
departments. Consultants are great when they're great but almost unimaginably
inept and expensive when they're not.

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AndyNemmity
And the ones that are inept, are experts at sounding exactly the same or
better than the ones that are great, making the difference difficult to
understand without equal expertise.

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icanhackit
Being a hard ass CEO isn't sexy, but it's what so many successful CEO's are.

> _Often, it is like a Russian nesting doll of contractor, subcontractor, sub-
> subcontractor, etc. before you finally find someone doing actual work._

I'd also argue that these multi-level contractor setups are a major security
concern. Ideally they should make it policy to have no more than one
additional level between Tesla and the contractor performing the work.

Aggregate contracting will make assigning liability a difficult task and it's
likely the person working for you is being underpaid as each layer takes their
cut. Meanwhile you get 100% of the shit-storm from any media backlash about
worker salary/conditions.

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solarkraft
It really makes me wonder: Isn't using contractors super inefficient? Why do
companies, when they could do it in house, use them?

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forapurpose
> Why do companies, when they could do it in house, use them?

A few basic reasons:

* You can't do it in-house as well as a contractor who specializes in this field, or as well as this particular contractor. Very broadly speaking, the best people in field X want to work for themselves, do things their way, and keep the revenue from their work. They don't want to be several layers deep in management at your company, to have f-ng morons (i.e., anyone else) telling them how to do their job, and to be paid a salary for the breathtaking, save-the-day miracles they routinely output.

* It's not worth the investment: You would have to find and hire talent, ramp up, provide resources to them (equipment, training, etc.), be able to manage the talent in a field that isn't your expertise, and keep them busy and interested. Maybe you don't have enough scale in the things they do to support quality resources; maybe you just don't have enough work or enough interesting work for them.

* Every additional employee or capability is a distraction for the organization, including management. Keep focused on the things you do best and that are strategically important; you don't even have time for that. If you're small restaurant chain, IT isn't strategically important - it just has to be reliable and good enough. Outsource it and focus on world-beating food, service, and marketing.

* You don't want to pay benefits, taxes, or have the other responsibilities of being an employer. See: _Uber_.

* Sometimes it's just politics: I once worked in an outsourced capacity for a company where the IT manager simply didn't want to invest in a technology that would threaten their fiefdom, so somebody brought in a contractor. It was not a fun place to be.

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l0b0
Is this meant to be shocking? When I was a consultant at a big European
telecom company the department got a new manager who started by saying that
there should be no multi-year consulting contracts - within a few months of
hiring a consultant the position should be either inhoused or outsourced. I
remember thinking “about f-ing time” even though my job would probably be one
of the first on the chopping block. The financial incentives are so screwed up
I can't believe consulting is still such a big business.

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aplummer
Without even factoring in work culture, the cost of a FT employee is really
really high in a place like Australia where you basically can’t fire people.
Want a 6 month project done, makes more sense to pay for a consultant team
than try spin up new employees. They come in for a set period, fixed
deliverables and accountability, then they go. Effect multiplies when it’s
something like IT and the business is completely unrelated to IT.

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exabrial
Wish the US government would do the same thing!

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tjr225
You're being downvoted but my work with a state government frightened me. It
was amazing how many contractors are building castles of crap and then
protecting them so that they can make an exorbitant living off of the teat of
the taxpayer - and I'm about as liberal as one gets - AND this was at the
state level.

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rbobby
This is what happens when you don't fill out your TPS reports correctly.

Sarcasm aside it seems like Tesla has operational issues. This coupled with
the story a few weeks back about somewhat "slapdash" power module assembly is
a bit concerning.

Musk is a visionary... but few visionaries are excellent operations people.

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empath75
This is one of those things that’s going to be painful in the short term and
pay off in the long term, but given Tesla’s precarious financial situation,
who knows if they’ll even have a long term.

It’s possible that musk is just trying to cut their burn rate and is going to
blame the inevitable decline in production after this on ‘restructuring’ or
whatever.

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cbanek
Having an employee vouch for you... does this not imply they don't even know
where their money is going as a company and who is valuable and who is not? I
agree, that having the line worker / employee using the part's blessing is
important, but surely there are more holistic top-down ways of evaluating
this?

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gk1
> surely there are more holistic top-down ways of evaluating this?

Which would take months. This is about sending a message as much as it is
about cutting costs (fast).

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wolco
What's the real message. Employees prepared to be fired as soon as we reduce
the outsourcing budget. Your jobs are not safe so if a better opportunity
comes up, take it.

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dwighttk
Can we take the #disqus_thread off the link?

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merinowool
Sometimes when employee learns how much given contractor make, they get very
bitter. I wonder how it is going to play out in terms of vouching... edit:
typo

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rdl
Tesla seems like a company where people would place a premium on being a
direct employee, vs. another organization. I'd certainly feel more 'pride' in
saying "I work for Tesla" than "I work for X" for almost all non-SpaceX or
tiny-startup values of X, and that's probably generally held by people who
would contract for Tesla.

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p1esk
_I 'd certainly feel more 'pride' in saying "I work for Tesla"_

Why? SpaceX, sure. But Tesla? Just because it gets more news coverage?

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solarkraft
Tesla is cool. But as a contractor, effectively working for Tesla, I'd
probably also call it that.

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mike555
I believe that in this particular case a contractor could be a company of
couple hundred (or 1000s) people or so, producing a sub-part of a car. Car
makers mostly just put the car together - they do not manufacture parts.

Which begs the question: can Tesla afford to fire contractors? R&D on complex
parts takes years, even at Tesla ...

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chriskanan
I wonder if this is to protect ip. I know of one self-driving startup in which
the founder recently had his wife get an internship with Tesla's self-driving
team. I'm sure there is a big risk of ip theft or just learning other things
that can give a competitive advantage.

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JJMcJ
The article is unclear. Does contractor mean supplier, or is it an individual
working at Tesla site?

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trymas
> Often, it is like a Russian nesting doll of contractor, subcontractor, sub-
> subcontractor, etc. before you finally find someone doing actual work. This
> means a lot of middle-managers adding cost but not doing anything obviously
> useful.

who would not like to cut down mess like this?

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bsder
Is it possible this just Tesla "encouraging" contractors to switch to
employees?

Contractors generally get paid significantly more than employees in the short
term, and Tesla is on the line for getting to profitability.

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ams6110
Employees have a lot of expenses that contractors don't have. Payroll taxes,
health insurance, other benefits, and generally there are more HR policies
governing termination for an employee than a contractor, even in an at-will
employment situation.

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SOLAR_FIELDS
Yes, in the major tech companies very few people will elect to stay W2
contractors if given the chance to convert. Most would prefer full time
positions.

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FartyMcFarter
Don't contractors have managers that are supposed to, well, manage them?

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walshemj
Not that sort of singleton contractor - and technically having a company
employee manage your day to day tasks will be take by the tax man as disguised
employment - not a good idea.

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ams6110
Yes, there will generally be a person designated to tell you what they want
done, but they can't manage where and how you do it.

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jerry40
For a Russian it is nice to hear about a matryoshka from Musk. (sorry for
useless comment)

