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Tesla fires hundreds from headquarters, factory (mercurynews.com)
184 points by fmihaila on Oct 13, 2017 | hide | past | favorite | 244 comments



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... [2] https://www.bizjournals.com/sanjose/news/2017/08/02/tesla-ts...


I'm not sure you can read into these three you linked.

Josh Ensign left to become COO at a different company and his stint at Tesla was the longest in his list of experience: https://www.linkedin.com/in/josh-ensign-3604431/

Greg Reichow worked at Tesla for 5.5 years and switched jobs to become an investor: https://www.linkedin.com/in/gregreichow/

Kurt Kelty was at Panasonic for 14 years and Tesla for 11.5. As far as we know from LinkedIn he hasn't got a new job, which you could see as fine (left for personal reasons or simply burnt out) or bad (left because he saw doom ahead, even though he didn't have another job lined up). https://www.linkedin.com/in/kurt-kelty-5604bb/

What is so bad about these departures? Simply the timing?


I may be conservative, but I don't consider burnout to be on a "fine" side of things.


11.5 years in a fast paced company that makes very ambitious deadlines is an incredible stint for anyone IMO. I'm just saying burnout after that isn't surprising, no?


If they are regularly burning out key executives, then I'd say we should definitely be reading into that. That's a sign that the operation isn't sustainable in the long term, or at least will plateau at lower levels of performance than it otherwise could hit.


So the startup mode will have to end? How is that surprising?


Because it's been in this mode for 14 years already.


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...

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


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.


Space-X has the advantage of competing with high-cost producers. Tesla is trying to move downmarket, where they have to compete with Chevy. Tesla should be able to make a good car. The question is whether they can make money on the Model 3.

In reality, Tesla's pricing strategy is to charge $50K-$60K for the Model 3.[1] This is BMW / Mercedes-Benz territory.

[1] https://www.fool.com/investing/2017/08/06/surprise-the-real-...


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.


I think firing without giving warnings and opportunity to improve is sick. These people don't even know they were doing badly. I can't tell if they've been told where they screwed up. These people could be spending a lot of time figuring out what went wrong when everything seemed to be going fine. They don't deserve that, regardless of performance.

They are people, they have lives and it wasn't anything like gross misconduct.

I think Mr Musk has a lot to answer for.


Some countries have laws requiring notice and time for a performance improvement period, before final termination of employment.


Yes, in Switzerland, for instance, a company is required to offer "job relocation" services for employees that have been working for the company for some years (I'm not sure how many exactly). These services (re-teach how to write a CV, how to prepare yourself for an interview, etc.) cost between 10K and 14K CHF per employee.


I'm in Australia and something like this seems very weird, you sometimes take for granted fair work laws till you see what happens in countries without them.


When I read about pip, I keep going back to https://news.ycombinator.com/item?id=11299310

I think even if we had regulations and requirements like that in the US, it would quickly devolve into a charade. Basically, a six month pip would be the same as a six month notice with the option to fire you any time anyway.


Dumb law IMO. I like at-will employment. I would be pissed if my company was paying 14k on my behalf for something so unnecessary. I can budget my education much better than the government, thanks.


Why would you be pissed? No employee is going to be 'pissed' about something designed to benefit them and ease a layoff.


How can you budget your retraining if you get same-day notice and just 2 weeks severance?


Having six months to prepare for being fire sounds better then "bye tomorrow".


Well Basically every Commonwealth Countries and Countries inside EU, or to put it another way, the difference between the World and US.


Musk seems to think that somebody like Chris Lattner is not good enough for Tesla, so his definition of a 'low performer' definitely seems a bit off. I just hope that the applies the same evaluative metrics to himself.


In a 'Groucho Marx'-ian turn, what would Elon do if he judged himself wanting? Would he have to find a successor, or would he just walk?


It is a hard question to answer, as my ideal would be to reflect on his findings and adjust his behaviour/expectations towards others to match, however I am not sure many people in his position are actually capable of such deep introspection.


The intention is not to improve performance by removing useless people- the intention is to improve performance and dissent-less quotas on those who stay.


I worked at a bigco during a RIF (reduction in force), and underperforming /teams/ or even /sections/ had their management told, “your team underperformed — fire X number of lowest performers”. Then the manager was effectively forced to just pick people to let go.

Shitty, but par for the course for many bigco places (outside tech), from what I have heard over the years.


I was consulting once for a large company when one of those came down. A manager I was working with really cared about his team, and it bothered him that he had to lay off one person for basically no good reason besides corporate politicking. He pushed against it for a while, but when they wouldn't relent, he laid himself off.

That didn't totally make sense, as they still had to find a manager for his team. But since the whole layoff was arbitrary, it didn't have to make sense. His whole team stayed.

I always thought it was a baller move. And looking at LinkedIn, he's had a solid career since, so it clearly didn't hurt him any.


So its, pick the least social performers, false friends and in-efficient co worker backstabbers.


It's often not underperformers. Just "pick x% of your team"


Do you know if the severance was based on time worked so far, or 2 weeks for everybody?

But yeah, this is terrible. If you don't expect you're going to be fired for bad performance, that's a company's failure, not yours.


He worked for 2 years. I am not sure what severance is based on. Also, with this article, Tesla pretty much trashed every employee they fired by publicly saying they are bad performers. Imagine finding a job now that you have been labelled a poor performer


They are bad performers for Tesla. That does not mean they are bad performers for other companies. The acceptance threshold at Tesla could be at a very different level.


I don't know if this helps your friend but I know BMW in Munich is hiring. A lot of departments are fine with English speakers. I found a couple of examples for him if they are useful:

https://recruiting.bmwgroup.de/ibs/Servlets/ibs/controller/s...

https://recruiting.bmwgroup.de/ibs/Servlets/ibs/controller/s...

I'm sure Mercedes and Audi would also have similar openings.


> 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.


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.


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


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.


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


I thing the difference you are thinking of is when someone is being made redundant versus being fired. Being fired implies the employee failed in some way. Being made redundant implies the company changed in such a way that the employee is no longer needed.

Being made redundant tends to be the situation that attracts a severance package of any significance. Depending entirely on the country and state of course.


At least in my state (MA) a while ago being fired with cause means not eligible for unemployment[1]. I knew this from someone (last century) being fired for being overheard quoting "office space" the movie on the phone, and therefor suspected of being dangerous. He was not given a chance to defend himself, but hated the job anyway.

"PETER Boy. I tell ya, one of these days... One of these days it's gonna be like

He mimics a machine gun. Brian, a waiter, does it too, in Peter's face."

He went to hearing to get his unemployment, and won because the layer from bigco, sent to the hearing from out of state literally wouldn't answer any questions.

http://www.masslegalhelp.org/employment-unemployment/ui-if-f...


I am not sure of the difference between firing and laying off. Manager basically said that today is last day, bring in your equipment etc


Typically you’re fired when you do something bad. I wouldn’t consider what Tesla did as firing anyone.

Poor performance isn’t typically a “bad thing” in this sense. For instance, if someone went and pissed in the coffee pot, they would be fired. If a big group of people were simply told to not come in anymore it’s laid off. Tesla specifically said this wasn’t laying people off so I’m not sure how that works.

I don’t know if there’s any legal or contractual grounds for one or the other but I’d guess it would matter what state you’re in.

I know for a lot of states collecting unemployment benefits does require some sort of reason for termination that is related to the above distinction.


without commenting on the unfairness -- as an employee, if you aren't prepared for this to happen to you, then you are doing yourself a disservice and are improperly managing your finances.

Any and all of us can, and some will be, 'fired' for less with less.


Often it is not about financial preparedness. It is about uncertainty. When will I get my next job? 6 months? Which means I will burn through my savings. If you are on a visa then things become exponentially complicated - you don't get unemployment insurance, benefits. What about healthcare ? COBRA is prohibitively expensive. How about the fact that the company announced to the entire world that you are a low performer? This is not even taking into account the emotional impact of getting fired cold.


All of the concerns you mentioned can be related to financial preparedness. Given a skill set and job market how long do cash to cover rent, health insurance, etc. The emotional uncertainty can be huge of course with job loss, but removing financial stress from that possibility should be a goal for most.


If you are an employee in the States, that is.

There’s a mandatory three-month notice period in Sweden, so that the person who is fired (or sho leaves) has the time to find a new job


That three month notice period when leaving is a hassle for employees, being a lame duck is no fun.


Better than being a broke duck.


Well, this is the case where you get a new job, so that doesn't apply.


The three-month notice period is mandatory, because:

- if the employee leaves, it benefits the business:

-- the employee has the time to hand over their work

-- the employer has time to look for and find a replacement, or prepare for work without the employee

- if the employee is fired, it benefits the employee:

-- they have the time to look for a new job

-- they continue working, receiving salary, and don't have to worry about bills, rent etc.

In both cases the employer and the employee can agree on the actual time when the employee quits: it could be the next day, or next week, or after three months, at the end of the notice period.


If you save some of your paycheck no need to be broke


Good luck being able to actually save some of your paycheck. I, for example, cannot because the rents here are shockingly high.


Then move!


My job doesn't offer full-time remote work, and as soon as you move to the outsides of Munich you pay the rent difference in transportation cost. No way.


Why do you feel the need to work in Munich?

There are thousands of places to work all over the world.

By all means work in Munich if you want to. But to choose to live and work in a city and then complain about rent is absurd.


Right. Being fired on the spot is much more fun.


What kind of role was the person in? Were they former SolarCity or Tesla Motors? Can you give us any other details?


No notice and 2 weeks severance? Moreover, I guess, no health insurance while looking for work? Wow, I don't think any other rich country could find this acceptable.


From the article, some folks are claiming that the firings were around attempts at organizing a union:

> Openly pro-union workers were among those fired this week. Some believe they were targeted.


He works in a white collar job. So, unlikely to be "pro union".


There are plenty of white collar unions. Society of Professional Engineering Employees in Aerospace (SPEEA) for one.


>They offered only 2 weeks of severance.

It sucks for him, but I hope he learns in future not to sign bad contracts. A day's notice and 2 weeks severance is super bad and I would not have signed it unless the pay was extremely good, as in so good I wouldn't have to worry about getting another job straight away.

EDIT: based on the downvotes many people here could use this advice: DO NOT SIGN BAD CONTRACTS!


The downvotes are probably due to the fact that there are no contracts in the states. It is at will employment


Not everyone is in a position to negotiate terms. Very few in the US would have that kind of leverage.


That is pretty common, dare I say almost a human right. It is suddenly becoming clear to me why people in America hate capitalism. I just thought it was bunch of lazy fucks who didn't want to work, but if you are regularly allowing employers to get away with shit like this, then it's no wonder.


Could you please post more civilly and thoughtfully?

https://news.ycombinator.com/newsguidelines.html


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.


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.


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.


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.


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?


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.


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.


> 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.

In addition, courts will be siding with the employee in lots of cases, and when the company has a Betriebsrat (workers council) and the Betriebsrat sides with the employee it is next to impossible to get someone fired without serious consequences in court.


I've worked for companies where it was easy to fire people. There was no shortage of borderline useless people and getting fired was usually more about getting on management's nerves rather than performance.

People living in fear of their jobs created the most toxic environments.


“People living in fear of their jobs created the most toxic environments.”

That itself can affect your performance and motivation. Tough out there.


> [Musk] also joked to employees they would be going through “production hell” to meet demand for the new car.

It sounds like taking sick days, vacation days, and going home at 5pm is exactly what Musk doesn't want from employees.

Germans are fortunate to have those benefits guaranteed by law (and culture).


This is not for Germany only. The majority of EU contries have similar benefits guaranteed by the law.


And they are called Rights, not benefits.


The comment I replied to, however, was about Germany.


I always wondered why laws are needed to require benefits. Seems like working for someone is a consensual choice that ought be regulated by the free market itself. Other than physical safety regulations, seems like the rest of it is government overreach. It’s also weird to me that a “contract” covers “workers” rather than a contact negotiated by each worker. Seems rather Marxist to me to consider workers as interchangeable cogs in the production machine. Some guy might not care about 30 days vacation but might prefer more money, as an example.


Have you ever watched a movie where the writers treat a computer as a magical thing, a deus ex machina? It's like they have a hazy theoretical idea of what computers do, but no real practical experience. If you're like me, watching those movies is deeply irritating. Why didn't they take the time to learn about the history and practical details of what they're writing about?

I have a similar reaction to your comment here. It is as if you know exactly nothing about the long history of labor markets. We started out with very unregulated markets, and have moved away from that for very specific historical reasons. You could reasonably argue that any given protection was a step too far, or that a particular regulation no longer makes sense given some sort of change in technology. But just handwaving it away? All of it?

When you say you've "always wondered", I have a hard time believing it. There are many books on this topic. Books, articles, podcasts, movies, blogs, everything. You can learn about the history of labor markets, the theory of it, the present-day reality. Your comment shows no sign of having done the slightest work to understand the topic.

Even if you are not inclined to study history, just try thinking about it as an engineer. Markets aren't magic. They are a specific technology for solving specific economic problems. There are conditions under which they work well, and conditions where they work poorly, sometimes so poorly as to fail. Like any other technology, they come in a variety of specific forms depending on need. They need to be properly installed and maintained if they are to serve the purpose they were created for.

Please go and learn something about this.


I think the issue is that a "free" market is a theoretical construct and not a practical one. There is a lot of asymmetry in contract negotiation and without these sorts of laws you get what we have in America, which is many people wanting more vacation time but having difficulty getting it (even software engineers who are very in demand right now will complain of not having enough vacation sometimes). From talking to Europeans I think most of them would agree that these laws make their life better and a law that makes their citizens life better pretty much across the board doesn't really seem to be huge overreach


The 19% of youth in Europe who are unemployed don't have any of the cushy legally mandated benefits of employment there, and might be happy to forego a few to be employed at all.


It varies a lot by country. Maybe I might have a little of a skewed view because I've talked to people mostly from Germany and The Netherlands, which both manage to have have decent labor laws and fairly low youth unemployment.


Because asymmetrical bargaining power, guy.


You should find out. Just wondering with underlying vague conviction where "things seems" forever is not a good thing.

Even Adam Smith knew that 'free market' is idealization and don't fit into everything without tweaking. Most non-regulated markets suffer from market failures and contracts have negative externalities. Smith's invisible hand was not all seeing hand.

As a market advocate myself, I approach markets as an economist. They are something can be made to work, but it usually involves mechanism design (= reverse game theory).

Collective bargaining and labor laws can have both positives and negatives. To make it work well requires discretion. Workers competing against each other with lower benefits has some very negative effects for the society.


>Seems like working for someone is a consensual choice that ought be regulated by the free market itself.

It's because the free market is a myth, and what actually exists is all kinds of forces playing against each other, using influence, media, money, laws, and the government for their purposes.

Now, the most powerful forces are those of the people with (m/b)illions in the bank, expensive layers, friends in high places and the ability to move their operations wherever they want, and those are rarely people looking for work -- rather they the people looking for employees.

Which is why laws are required. Because a democratic government represents each person equally -- each has one vote, regardless of their wealth (again in theory, like there's no free market, there's also no actual democratic government). So it serves as a counter-balance between small people and big people/coprs (governments can be in bed with big people/corps but they need to pander to small people too in order get their vote).

Add to that, the fact that without any government at all, you don't get anywhere close to a free market either.

At best you'll get the heavier players doing everything they like -- and having private armies and thugs enabling them, to which regular people can just suck it and play along.

This has been the case in some places in developing countries for example, where, while there nominally a government exists, it's so in the pockets of the local moguls that it's just like their private mercenary enforcement force.

>Some guy might not care about 30 days vacation but might prefer more money, as an example.

Without any kind of legal pressure, guys and gals are gonna get neither "30 days vacation" nor "more money".


I'm a movie industry veteran. You're struggling to get that first job. You have no savings, and lots of student debt. I'm the gate-keeper to that first job. A single word from me, and you're in. A negative word from me, and you're out.

You're also really cute. Hmm. Let's see ... maybe I can help you if you help me ...

It's all about the power differential.


Because many workers won't have an option - if companies aren't forced to offer so many days holiday time, they just won't offer it. If you try to negotiate for it, you won't get the job (from an employer's point of view, most workers are, by necessity, interchangeable to at least some degree).

Sure, people with a long track record or specific skills may have more room to negotiate, but for entry-level and/or unskilled work you'd be unlikely to get more than the minimum enforced by law.


Because the power dynamic is asymmetric.

That said, tools like collective bargaining and unionization can bring it closer to the market ideal - workers acknowledging and taking advantage of their importance to the business to the same extent as the employer does.

In practice, many external if not anti-free-market factors have made that grouping harder to do.


I think you can always get rid of workers if you are willing to pay enough.

What is the maximum compensation German courts award for unlawfully firing an worker? Something like 1-4 years salary is my guess.

If Musk want's to fire 2% of German workers every year, he could budget 2 - 8 percent more for his labor cost.


I don't know about Germany, but in other European countries, the judge might also order you to rehire an employee in addition to the back pay and damages.


It's true that if you have 30 days of vacation that that comes from your contract, but that's a pretty standard perk with large-ish companies. The legal minimum is 24 days though [1], so that's as low as it can go. Usually after a couple years of working for a German company, you have a permanent contract, which can only be changed or revoked under cases that are also regulated by law (e.g. layoffs because of cash shortage or continued, documented underperformance).

[1] http://www.gesetze-im-internet.de/burlg/__3.html


Do they set a "quota" for 2%? Or is it that they do it every year, and 2% is about the number that falls out?

I do agree that a "firing quota" is backwards; it should be a standard of performance. But even in a healthy, high-performing company, 1 (or maybe 2) out of 100 people being a drag/net-negative contributor doesn't sound far too off. Ultimately I think it helps the other 98 people to ask those two to leave as soon as it's clear they're not going to become a net positive. If that assessment comes at a specific time of year, so be it; if it's "Okay, we have /n/ heads to chop off, where are they coming from??"... then yeah, not so much.


The problem is that a true company-wide firing of bottom 2% of performers is impossible - you would have to somehow compare and rank people with vastly different roles to pull it off. So the way to do it is to first choose unlucky departments and set a quota for each department, then choose unlucky managers and let those managers choose unlucky employees. Which makes it a lot more similar to a layoff than the company likes to admit. These employees may be perfectly solid workers but now they have to bear a stigma of being fired for "performance" reasons.

I had a manager friend whose company went through a "not-layoff" when approx. 2% of the workforce were let go. His group was among the unfortunate ones so he was told to choose one victim among his subordinates - but there was no one with unsatisfactory performance in his opinion. Still he had to choose. Didn't improve his morale that much - he quit shortly afterwards.


I was actually in a similar spot once... I choose to fire myself...

The company is out of business now, mainly due to poor and unethical management


Thank you.


I know something similar often happens in the public service. Public service managers quickly learn to always hire a few useless people who they don't really need, just in case they need to make cutbacks.


Hiring people becomes a no-lose gamble: if they're good, great; if less good, solves a problem at year-end.


With unlucky departments almost always being cost centres rather than revenue centres.


Any company, whether it's our pet tech company or a boring bank, will have to let go of what they believe is under performing staff at some point. Some companies manage to do little by little so no-one notices, some do it in bulk once a year and it becomes news.

I'm not sure what is better for the employees but often middle managers tend to keep their staff until forced by top management to let someone go.

As for "destroying" lives, I suggest we don't let ourselves get carried away by this. A job is a job; a means to make money. There are other ways to make money, including by taking another job or by starting your own company, which is very realistic for former Tesla engineers.

Just like you are not obliged to buy a Tesla model 3 although you might have bought a Tesla model S beforehand, Tesla is not obliged to buy your services as employees forever and ever. A job is not till death do us part.

As for comment about "arbitrarily" firing people; there is nothing that supports that Tesla did that. Why would they fire people arbitrarily? They are scaling up. The last thing they would do is to fire for the sake of it.


When you mass fire people like this, it can only seem like your plan was to fire a large set of people and you made it a goal to find them. You're quite likely to find people to fire that are down on their luck for some reason or another.

You're also quite likely to alienate or scare a sizable portion of your workforce. Anxiety about getting fired will drive a lot of people to perform worse. Conversely, a feeling that your company will support you during rough times can make those rough times shorter and help productivity.

It's also about diversity. Diversity of life situations, diversity of mental health status, diversity of motivations, etc. etc.


If it helps, he didn't really found PayPal or have much of anything to do with it one way or the other. He founded X.com, which merged with PayPal. He left after not doing much beyond arguing with Max Levchin about Windows vs FreeBSD. IIRC.

Most people considered him kind of a joke before Tesla and SpaceX were mainstream successes.

He's done amazing things with that PayPal money though. I bet a few dozen people on HN have ambitions as big as Elon Musk's but haven't lucked upon an easy $160M cash. He's the proof of what's possible when the right kind of person does.


Wikipedia says that he founded X.com, which merged with Confinity, initially he became CEO and later Peter Thiel the founder of Confinity took over and the company was renamed to PayPal.


Yes, it's a bit confusing. Confinity created PayPal (roughly as we know it) before merging with X.com. X.com was a failed online bank and not really doing anything like PayPal's eBay stuff.

> Confinity launched its milestone product, PayPal, in late 1999.[1] Confinity merged with X.com, founded by Elon Musk, in March 2000. The merged company became known as X.com because this was thought to be a name with broader long-term potential than Confinity or PayPal. However, surveys showed that a majority of consumers considered the name X.com vague and potentially pornographic and preferred that the company simply be called PayPal. After a corporate restructuring, the company adopted the name PayPal Inc.

https://en.wikipedia.org/wiki/Confinity


From Wikipedia, he was the CEO after the merger who decided to shut down online banking and focus solely on PayPal. It sounds like he had a lot to do with it.


It wasn't even a choice. X.com was a failure and PayPal was taking off. Ultimately, this kind of decision is up to the board anyway, not the CEO.


...


Maybe quote the part of the article that makes you think that?

They created and launched PayPal, and it took off (i.e. got traction on eBay), before the X.com merger.

> 1999–2000 December–February Customer focus shift Confinity identifies eBay as a promising area to acquire users, because of the high concentration of buyers and sellers and the absence of any standard payment system for them to use.

https://en.wikipedia.org/wiki/Timeline_of_PayPal


You're right.


How is an "annual purge" of low performing employees any different ethically to a day-to-day purge of low performing employees?

The only difference is HR strategy. Perhaps they want to signal to the labor market that they're not shy about ridding themselves of second-rate colleagues? I don't like working with second-rate colleagues; it certainly makes me want to work for Tesla.


I've heard of tales from Cisco where managers tried to get internal transfers of bad employees to their team so they'd have somebody extra around to fire when cutting time comes.


It is difference between solving problem of low performance employee and searching for employee to be fired as you believe someone has to go.


How would it be different if a hospital murdered X% of their worst-prognosis patients every January 1st, rather than letting X% die over the course of the year regardless of interventions?


An invalid (and thoroughly disgusting) analogy. You are conflating murder and death in a rather untidy way, and hoping that the disgust for the analogy taints that which we're making an analogy about.

If you like the theme of murder: How would it be different if a prison, rather than executing death row inmates on the first day they were legally permitted, instead delayed their executions so they could bundle them up into annual batches?


That's not the same at all, though. The prison is doing the same thing they would be doing, only on a different schedule.

Tesla has demanded that firings be carried out at the same rate as average attrition for poor performance, even though those two things have different causes and remedies. People who perform the least-well on their team but are still a (potentially large!) net benefit are generally not fired, but systems like this demand they be.

What's thoroughly disgusting is an employer summarily firing the bottom X% of their workforce, largely because the top management fucked up scheduling and needs to restore investor confidence.


There are so many assumptions in your posts that it's really not worth responding to them.


This is a ridiculous analogy -- Hospital patients (for the most part) don't have control over their diseases, employees (for the most part) have control over their performance.

(Also, patients are customers of the hospital -- you should be comparing this to hospitals firing their worst doctors every year, which IMO, would be fantastic.)


What style - firing 2% of your employees in a given year? That is not a very high rate for a large company. It's only news because everything Tesla is news.


2% turnover over the course of a year might not seem high. Firing 2% of your workforce in a single day is.


Research shows the long-term effects of disruption are a function of its duration. (If you’re looking for the paper I am referencing, it was an IMF paper on the effects of conflict on economic productivity.) Short and harsh is better than long and simmering.


I get that. If there's a layoff or a re-org going on, getting it all done at once is better. The idea of losing poor performers on an annual basis is the one I cannot get behind.

I am perfectly fine with the idea that someone who isn't doing there job loses it. Where I have a problem is that once a year managers are told to dump their lowest performing people. The reality is that people will game the system. They will hire with the intention of firing. They will fire people who are adversarial either personally or professionally. They will fire people for arbitrary reasons. They will fire people for personal reasons. While tech work is easy to come by right now, it does not mean that the experience will be easy to deal with. Each person who was fired will now have to explain themselves to their families and their prospective employers. I doubt many of them took the job in the first place knowing it was not a stable environment.


The alternative is everyone waits for an excuse, the next recession, and then you get a massive 10% layoff.


The alternative to arbitrarily requiring a proportion of staff are fired on a certain day and thus institutionalising the necessity of having disposable staff members to protect your core team is setting real performance standards, offering real criteria for improvement and firing people that can't or won't improve to meet standards regardless of what time of year it is.

Companies that impose forced stack rankings and firing quotas don't exactly have a great track record of avoiding large redundancies in recessions, and indeed due to company-wide underperformance...


I know Tesla seems to hold a special place for many people. But I don’t see how these business practices result in them disrupting the automotive industry.


Some of their employees are not good. Some of them disrupt the others. Some of them are negative. They make the other talented employees not want to work at the company. So you remove them. The remainder of the company is then happier and produces better results.


If someone is disruptive or negative, then you should get rid of them immediately.


Disruptive maybe, but negative?

Some people became negative because they saw problems they can't resolve by themselves. Maybe don't fire this kind of people?

But, well, it seems some companies just don't care.


The problem is that negativity goes nowhere. There's nothing special about raising a problem until you have a realistic proposal about how to address it either fully or partially.


It's the Jack Welsh management style.

https://www.manager-tools.com/forums/jack-welchs-20-70-10


Culling the bottom 10%, every year, is a big step beyond this.

This one seems off, especially noting that some of the fired say they never received a bad review. But it's not yet in that league.


Firing a person should not destroy their life. Something else is really wrong if this is the case.


Most people, even well paid engineers, live paycheck to paycheck.

Sizable companies take a month to bring in a new employee in the best case.

Most hiring managers are skeptical of people fired in a mass "underperformance" firing.

Toss in the fact that most people have never been fired and it's a massive blow to the ego. And also that it's terrible to communicate to your spouse and children that you've been fired for doing a bad job at work. That's a recipe for depression. Which makes it even harder to find work again. Which exacerbates the depression. And you're living on credit. And the bills are piling up. And you are starting to get phone calls.

If you can't jump right into a new job, it's a hard situation to be in, no question about it.


There's no reason a well-paid engineer (let's say $75k-250k) should be living paycheck to paycheck, even with a large family.

If someone is, they should realize they deliberately chose that situation by failing to adjust for cost of living when comparing employment options.


Someone married with 4 children at $200,000/year earns a net pay of $10611.48 in California with a 5% deduction for retirement.

If they worked at Tesla and lived in Palo Alto, they would need a 5 bedroom house. That's an $8,000/month rental.

The average car payment in the US is $503. One car for dad, one for Mom, one for the teenager. That's $1509. That leaves $1102.48. Take $600 for electricity, water, and trash. That leaves $502.48 each month for food, gas, car insurance, parking, sports, birthdays, christmas, etc.

All of a sudden, Palo Alto doesn't seem so appealing, so the family moves to San Jose where a nice 5BR can be had for $4500. More affordable. The budget isn't so tight. The family can go out to dinner once in a while. They can save $1000/month. But it costs Dad 2-3 hours a day in commuting time. And he shows up late once every couple of weeks because the traffic is atrocious and his hours are set.

Well that pisses his Tesla manager off, so he gets cut as a low performing employee. He gets 2 weeks severance - $5k. He's saved up $5k over the last 6 months. He's not eligible for unemployment because he was fired for cause. He has 30 days to start a new job, at close to $200,000/year, or ... well... he's living on credit. So he takes a job at $150k/year because those are easier to find and he's under pressure.

Now his income is down to $8400/month. To a lot of people, that's still a lot of money. To this guy, he's treading water. It's hard for people to sympathize with this situation. Especially people out of the area with no kids and no debt who could live quite well on that kind of salary. But it's reality for a great many people. Maybe it's not 3 five-hundred dollar car payments. Maybe it's required tutoring. Or helping grandma make her house payment. Or paying for dead-beat brother-in-law's rehab.

Looking around at SV families, I see more people busting their butts to get by than I see buzzing around in sports cars. There are people that are comfortable. There are people that can get by six months without working. I don't think it's a large percentage of the population.


Sure, because everyone has enough money in the bank, no running expenses, no health issues, and a new job just around the corner.


Leaving at the same time as a whole bunch of your colleagues are dumped on the job market makes it more difficult to find a job.

Having news stories that you are in an underperforming two percent won't help either.

This is a pretty callous move and no surprise it has affected morale.


> 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.

Bingo! I never quite got the Musk hype train, between how he treats his employees, doesn't respect work life balance, has unrealistic expectations and talks about people not wanting to work for him as less talented, promotes the idea of American exceptionalism etc., I don't see the appeal.

As for his 'accomplishments', he seems to talk a lot and constantly over promise/under deliver. I guess his appeal is that his companies at least approach the exciting territory, which is quite a difference from another 'food delivery startup' of the Valley, but lets not make an average (if electric) car made by Tesla, with plenty of its own, documented QC problems something it is not, just because Musk is involved.


Musk is many things.

* As an investor I would not invest money in Musk's business. It's too risky and ego driven. He finances his endeavors just as creatively as he does technology and takes lots of risk. He is clearly not after money. Money is just tool for him. It's either Mars or bust. Inspiring but not good thing from investor point of view.

* From a technological point of view I admire what Musk has accomplished. His single mindedness has moved space technology forward. He should be admired for what he has done. He has deserved his hype. He has knack of getting things done while stretching everything very close to failure. Even if his businesses fails and he loses everything, that technology is there and others buy it.

* From a humanistic point of view, I understand that Musk will throw people under the bus if they are in the way of his goals. I would not want to be dependent on him any way.

Musk is very typical driven tech industry titan. You have to prioritize. If personal ambition is high, all other issues must come second. Musk, Jeff Bezos, Steve Jobs, Bill Gates all have documented mean streaks towards other people and workers. We should understand that highest level of accomplished very often comes with high human cost. There is a choice.

This is where government regulations should come in.

Musk is not treating people badly because he is malevolent. It's just means to the end. If mistreatment of workers can't be used to gain competitive edge, it stops.


He risked everything to make a rocket company from nothing, if ever there was a person that earned the hype, this is the person.


Really? Everything? His life? His children’s lives? Or just money? Or just his investor’s money?

My point being if you have a lot you can risk a lot in absolute terms, but maybe not so in terms relative to your own wealth or well-being.

I don’t think he even risked his reputation with his space rocket thing. ‘Fail fast, etc’, right?


He's risked far more than most investors, including bailing out his own companies (SpaceX and Solar City) by taking personal loans against his stock in others that were doing better (Tesla).

If he hasn't infused the cash, SpaceX at least would have failed. There were a number of finance articles about it at the time "questioning" the odd moves, but paraphrased from Musk, 'If investors are risking their money, shouldn't I be risking mine too?'

If your metric for "enough" is "work to literal death" then I expect you'll continue to be unsatisfied.


He was at one point, when both Tesla and SpaceX were early in their lifetimes and bleeding money, on the verge of bankruptcy and (from what came out from his ex-wife) a mental breakdown.


Space X was a Falcon failure away from shutting down. Isn't that risking reputation enough? He's selling the world the vision of Falcon Heavy, BFR, Mars colony. Any of that fail and he will be known forever as an ambitious but failed businessman.


The result was failure. Now we are approaching two failures with other people's money. He has these lofty ideas and unrealistic promises none of which he can deliver on. It's almost like he's an underperforming employee.


Podcast on Netflix's practices: http://www.npr.org/sections/money/2015/08/28/435583328/episo...

They're pretty brutal. In one case a woman works herself to the point of chronic back pain. They tell her to take as much time as she needs to recover. But when she comes back, her job is gone (they didn't hire someone else, they just eliminated it).


I'm not a fan of this style of management either, but at this moment in time we need a standard bearer for electric cars, and Tesla is best placed to fill that role at the moment.

After the (hopefully successful) release of the Model 3, assuming this drives other companies to push forward electic cars, we won't need Tesla to be successful anymore, so I'd expect more people to be critical after that.


How does the Bolt fit into that framework?


I think people question GM's long term commitment to electric cars based on its history and legacy ICE business. That may change, but it's going to take awhile from anyone who remembers how the EV1 went.

https://en.m.wikipedia.org/wiki/General_Motors_EV1


I never drove an EV1 or anything, but I remember people being really mad they wouldn't sell them at prices equivalent to the really cheap leases they offered them to the public with, and that they had mediocre range (and remember NiMH batteries? Ew!).


> and remember NiMH batteries? Ew!

In 25 years, I'm sure we'll be saying the same about our current lithium ion chemistries. You engineer with the technology you have, not the future technology you wish you had. ;)


Even after some huge advance that rendered lithium-ion obsolete, I imagine I would still think of them as the line in the sand between batteries that worked okay and batteries that were pretty good.

Not just for electric cars, things like cordless tools, lithium-ion versions are much nicer than anything that preceded them.


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.


> 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.


If your employer who apparently fires people randomly asked you in a survey if you are happy about your company, would you answer honestly?


Haha, well, that's true, but I mostly meant that it looks like they might be being disingenuous about the real reasons for the firing so that they can sidestep the law about notification before a layoff. Especially when you consider that during any layoff they're probably dumping lower performers anyway.


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


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.


An unannounced layoff, though?

> Workers spoke on the condition of anonymity because they feared reprisals from the company. Employees said the firings have lowered morale through many departments.


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

Probably not right during the ramp up of the most critical product in company's history...


Note the bit at the end:

> Tesla has a hearing before the National Labor Relations Board in November for charges that company supervisors and security guards harassed workers distributing union literature. Tesla denied the accusations.

>Openly pro-union workers were among those fired this week. Some believe they were targeted.

> The company denied union activities played a role in the dismissals.

There are dynamics in blue-collar labor and generally manufacturing that are not relevant to software companies.


No plan, just some dictatorship in action. They see trouble coming and make some random moves


most large IT company do, including amazon google and ibm


Amazon and Google both do PIPs before firing low performing employees. That means several months (usually 6 or more) of pay and time to find a new job. It also means your employer isn't in the news with "Everyone who left in October is a low performer you shouldn't hire."


Google doesn't do this.


[citation needed]


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.theguardian.com/technology/2017/mar/15/silicon-v...

https://en.wikipedia.org/wiki/Psychopathy_in_the_workplace

https://www.washingtonpost.com/news/on-small-business/wp/201...


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.


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.


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.


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.


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.


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.


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.


While 300-700 people sounds massive, it's out of 33,000 or about 1-2%. It's not hard to believe that 1-2% of a company were bad hires, couldn't/didn't deliver, or weren't a great match for the job anymore.


Admittedly it's a small fraction. To me, while not a communist by any means, I do think that cos. often simply think about he employee-employer relationship as unidirectional: the employee owes the employer but I see more and the company owes society at large to support its workers, where it can. Not saying they should carry inept unqualified workers, but that they should make some effort to place mal-assigned workers. Make it work for everyone, in other words.


Projecting responsibility for societal well-being onto for-profit employers is crazy. If we think everyone deserves something, we need to provision it directly as a society.

Corporations are poor stewards of our welfare, and trying to coerce them into this role (i.e. minimum wage, healthcare mandate, obligation to hold on to unneeded workers like you propose here) has the nasty side-effect of inhibiting potentially beneficial transactions (pushes employers towards automation, encourages them to split decent full-time jobs into several shitty part-time jobs to stay below eligibility thresholds, locks the lowest-value workers out of the market entirely, keeps the product category well below its potential i.e. taxis, etc).

If we think people should have at least a certain income (and I do), we need higher taxes and a stronger welfare system, not more labor regulation. If we think everyone deserves good healthcare (and I do) we need single-payer, not an employer mandate. If we think people shouldn't have to face loss of income due to economic conditions, we need to strengthen unemployment insurance, not pressure companies to keep workers they don't want or need.

Going down the path of engineering a perfect society by attaching obligations to the employer-employee relationship just disincentives employers from starting those relationships if they can help it.


I completely agree. It's the single responsibility principle, applied to society. In Italy, for example, the mistake of not following the SRP has produced such an entanglement of the responsibilities of businesses with those of the State that the result is a mess of spaghetti code with exceptions layered upon exceptions, almost impossible to reform and still not providing everyone with the same basic stuff (as an unemployment benefit, for instance).


If corporations are suddenly liberated from labor regulations they are not going to reverse their decisions and sell the robots to employ more people or make part-time employees full-time. Cost cutting is a war of multiple fronts.

Labor regulation has the same effect as taxes, the money just doesn't go through the government. Higher taxes and no labor regulation would have similar consequences in corporate profit-seeking decisions, because corporations are the ones paying most taxes anyway.

Besides, there is no clean separation between government and corporations, I think it is improbable that taxes are raised after getting rid of labor regulations.


>Labor regulation has the same effect as taxes

Not really: taxes are percentage-based. They turn profitable transactions into marginally less profitable transactions, but stop at zero. Minimum wages and benefits set an absolute floor below which the transaction is not worthwhile.

Even if you're not upset about the loss of low-paying jobs (and that's fair), if we think everyone deserves something, getting it should not depend on finding a job.


I don't know how much of this I agree with but I definitely agree with most of it. I also hadn't considered the fact that we have forced businesses into the role of government because our government is underperforming.


Without knowing the details - which we never will - we don't know which of them were just in bad positions for them or if they moved 10, 100, or 1000 to better fitting roles or if there were the "better fitting" roles for this group.


There is some truth there but what you say really only makes sense if you are talking about massive layoffs that would have a major effect on the local labor market.


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.


> 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.


I don't know if OP meant stack ranking, but I've definitely seen approx 20% annual turnover at a well known consulting firm, by design. Either you go up or you are out. Not stack ranking, just performance review. Cut throat environment, but the upside is the firm is able to keep the very sharp ones. Also the alumni usually end up at other firms that can potentially become future clients. Seems to work very well for this consulting company.


> Seems to work very well for this consulting company.

But is it working for the rest of us?


Maybe. Maybe not. Those who chose to work for that firm know full well what they're getting into. They hope to make it. 20% of them won't. Not much different than startups?


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,...


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.


These Best Places to Work awards don't really tell me if a place is actually a good place to work. It is, however, a pretty good indicator of how strong the kool-aid is at a company.


My understanding was that tech (and I consider Tesla tech even if it's inherently auto) companies were getting away from the stack rank evaluations (save a few). So I'm a bit surprised Tesla is going in that direction.

High demand workers have more opportunities and those that can (the good ones) will find a diff job that does not play this kind of churn game. So I'd thought.


There is no stack ranking involved (as far as I know, at least in SW). That's why when an engineer is evaluated as under-performing this is really about their own (manager-perceived) performance vs the expectation, and there is no question about whether they'd be in an exceptional team. Now instead of a formal PIP that we know won't get anywhere, HR isn't shy about letting go dead-weight. My impression is that the default approach from HR when a manager rate someone as under-performing is that we should let them go, unless the manager wants to setup some sort of PIP.


Occasional underperformance is normal variance as is overperformance. If you can't handle these cases you don't belong in management, and if you fire everyone for underperforming once (your suggestion) you will soon have no workers, and you will cause everyone remaining to underperform.


I think you missed the essence of my comment which was "there is no stack ranking and being evaluated as underperforming is then not a result of stack ranking".

I'm not sure what you mean by `occasional underperformance`? I'm talking about a yearly performance evaluation, in my opinion an overall underperforming for a year is not "occasional", it shows something systemic. The truth is that sometimes we make bad hiring decision (in my group it has been 2-3%). We try to work with them for a few months, set goals, but ultimately you can't always recover everyone.


A single occurrence is never systemic.


You haven't defined what you mean by "single occurrence"? To me being low one month, or during a two months project can be a single occurrence, but that wouldn't lead to a "bad perf review" (at least not in my team). Being clearly underperforming for a complete year without changes after setting up intermediate goals for improvements is not a "single occurrence". When a Sr. Staff which is less productive than other junior engineers, and requires the same level of guidance, something isn't right.


A single bad review.


> The system is not inherently good or bad, as long as all parties are aware of it.

There's a lot of problems with stack ranking, not least that it discourages cooperation and encourages direct or indirect sabotage (e.g. declining to hire new prospects who you suspect might be better than you). Wikipedia discusses many of the issues: https://www.wikiwand.com/en/Vitality_curve


There is another problem with stack ranking -- I saw this at a previous employer: some people are hired into "4s and 5s" from the onset. I heard some hiring managers upset that they would have to force rank their hand-selected elite team into 1-5 ranks, and upset at the situation, they purposefully hired weak workers with the intention of slotting them into 4 and 5 ranks. Their argument was (i dont agree):

- these weak workers wouldnt otherwise have a job

- these weak workers get an extra year of employment they "dont deserve"

- the strong team members get the 1,2,3 ranks they deserve

- the hiring manager is "forced" to do this

All that said, seems incredibly unfair to hire people directly into the chopping block without the expectation set from the start.


Wow, that sounds awful.

It's a losing situation all around, between the company not getting what it intended (firing the pre-existing dead weight, and getting rid of scapegoats) and, of course, the employees who are duped into joining just to be fired later.

Which companies do this?


It’s an oxymoron.. ‘we only hire the best and stack rank the rest’.


> dead weight

Calling real people "dead weight" is insulting and dehumanizing.


Any term for being awful at your job (either in skill or motivation) is going to be insulting. What would you suggest to avoid being dehumanizing?


You can always stack rank your employees and select some people at the bottom, regardless of how amazingly awesome your entire talent pool may be. Those at the bottom are not made awful at their job due to your having ranked them there. No need to label and insult them on their way out when you have to tighten your company's belt.


You will always have a worst employee, but that's not what "dead weight" means. To be dead weight at a company with good talent, you have to be multiple categories below almost everyone.

>No need to label and insult them on their way out

You never need to say when someone didn't do their job, but it's not a terrible thing to do so either. Don't go out of your way to be insulting, but if the basic facts of the situation are insulting, then so be it.

>when you have to tighten your company's belt.

They stated very clearly that it was not about belt-tightening at all. Do you think they're lying?


Only disagreeing that that "dead weight" even needed to be brought up.

> Do you think they're lying?

No, no, I implicitly trust all communications from corporate authority figures, of course.


> Only disagreeing that that "dead weight" even needed to be brought up.

I think it's relevant in a discussion of why a firing occurred. (And that overall discussion has a lot of upvote weight.)

> No, no, I implicitly trust all communications from corporate authority figures, of course.

That's a total deflection. Lack of trust does not let you figure out if any particular statement is true or not. Even dumber than blind trust is to assume everything a corporation ever says is a lie.

So is it your evaluation of the situation that this particular statement is a lie?


Lack of trust should mean the burden of proof is on the untrusted. Waiting to fire (not lay off) bad employees en mass at least smells funny, you have people who weren't fired saying it hurt morale, and possible ulterior motives. But no, no hard evidence, only justified lack of trust.

I never said that statement was a lie (your word not mine); I have no reason to take their claims at face value either.

So by all means, let's continue talking about how much those loser dead weights who got fired must have sucked.


You seem actively hostile to the idea of there being bad employees, and I'm not sure why. Such an idea is completely independent of whether corporations are involved at all.

But corporations are usually very reticent to say negative things about people, so for them to specifically call these people out as bad employees at least makes it plausibly true.


> You seem actively hostile to the idea of there being bad employees, and I'm not sure why.

Why do you say that? Of course there are (were?) bad employees. If they did indeed fire the worst performers, some of them were quite likely bad employees.

> But corporations are usually very reticent to say negative things about people, so for them to specifically call these people out as bad employees at least makes it plausibly true.

Also plausible that it's misdirection or that they're assholes. =)


I'm not classifying them as dead weight, Tesla is. If they are firing them, they must in some way believe they are dead weight in some context. It's not an indictment on the employees, it's an indictment of Tesla.

On the other hand I believe these people are not dead weight and are redeemable with the right effort.


> I'm not classifying them as dead weight, Tesla is

Then use quotes, that's what they are for. Otherwise you are implying you agree with Tesla corporate vocabulary.

Let's not be hypocrites, at the end of the day it won't change people's fate, however they are still owed a minimum of respect as human beings, they are not mere cogs in the capitalist engine, no matter what Tesla's management thinks.


They ARE deadweight as far as the employer is concerned. Nothing disrespectful to them. They may be very good in some aspects and decent human being, but they are at a wrong place.

Parting company should benefit both side. Layoff often come with severance package to give those who were let go time to find another job, at least I hope that's what Tesla does.


> They ARE deadweight as far as the employer is concerned

no that's just how the employer qualify these people, it doesn't mean these people are responsible for Tesla's shitty management or them missing their financial objectives. They are scapegoats Tesla uses to save face in front of their investors.


I wouldn't qualify them as that, and neither did Tesla. Not everyone is the right fit for the job they are currently working. People can struggle with a job for any number of reasons.

Companies will very rarely propose a pay-cut, but more likely they would just rather find someone else. Because they have specific jobs that needs doing and can't afford to have something done poorly.

Even if hiring was perfect there would still be rational reasons to fire sometimes. And hiring is far from perfect.


I agree they are scapegoats for bad management. They should start firing the CEO. He over promises and then grossly under delivers. Making people work in bad conditions will turn good people into bad employees/DEAD weight. They were DEAD weight because people need rest and time away from work to maintain optimal performance.


You seem so sure of your conclusions without any evidence (if you do have evidence then please provide it). I firmly believe in workers rights. I also firmly believe in evidence. California has some of the most employee friendly employment laws in the US. Germany some of the most in the EU. As long as these employees have reasonable severance and Tesla followed the law I don't see much room to complain. If however they were treated badly or illegally then I'm reasonably certain that a lawyer will help them on a contingency basis.


I'm not so sure of anything. That's the way it looks to me from reading the article. The way it looks to me from reading the article is that these employees were labeled as underperforming simply so the company could avoid triggering any sort of legal scrutiny. I could be totally wrong. It's likely that I'm not considering people walked in without any PEP or any notice and were let go even according to another poster on HN.


I suppose "dead weight" can be redeemable, however I would say that if you are "dead weight" you probably have the wrong job, and are very likely better off finding something different.

As we get older, that's less and less of an option, and often we have to put up with a job rather than enjoy a job.


So if dead weight often is attributable to wrong job (rather than utter incompetence) isn't job redistribution.assignment a more or less manageable issue when you have 33 thousand emps?


Interesting comments can also be found here: https://news.ycombinator.com/item?id=15470314


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"


>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.


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.


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


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.


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


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.


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

https://www.quora.com/Could-Goldman-Sachs-strategy-of-firing...

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.


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...


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.


> If your output of products is about to dramatically shift there is no reason to think employment should remain stable among all departments.

Among all departments, of course not. But the job of administration and sales for the old model of car is a tremendously close match to administration and sales for the new model. If they didn't have a sufficiently large desire to fire these people, they would transfer most or all of them over.

The solarcity firings would possibly represent a shift in labor requirements, but even then they are strongly denying it with the claims of performance-based firings and not layoffs.


If you are right then the talk about performance is just subterfuge to circumvent the law, and also it starts to look like they also illegally targeted workers talking about a union (which certainly looks bad if you've just been in the news for having too many workers injured on the job).


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.


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.


SolarCity is an albatross of debt around their neck... no surprises. They have to raise debt for a long time just to get financing these obligations. No dog and pony shows, just paper to pay off paper.


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?


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


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?




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