Elon Musk fired 500 Tesla employees after their division chief said no to layoffs

New Delhi,UPDATED: May 16, 2024 20:28 IST

In a dramatic and unexpected move, Tesla CEO Elon Musk fired the entire Supercharger team after a disagreement over further layoffs with the division's chief, Rebecca Tinucci, according to a report by Reuters. The decision came after Tinucci resisted Musk's push for additional staff reductions.

An email sent by Musk to Tesla employees on April 29 revealed his intention to dissolve the Supercharger team, which is responsible for the company's charging infrastructure. However, Musk soon reversed this decision and rehired some of the dismissed workers, as reported by Bloomberg.

The tension escalated following a one-on-one meeting between Musk and Tinucci the day before the email announcement. According to Reuters, Tinucci had already laid off approximately 15% to 20% of her team prior to the meeting. Her refusal to make further cuts led to Musk's decision to dismantle the entire team.

The layoffs are part of broader cost-cutting measures at Tesla. Last month, Musk announced a significant reduction of more than 10% of Tesla's workforce, which numbered over 140,000 before the cuts. This move is reportedly driven by declining sales and mounting competition from Chinese automakers such as BYD.

Bloomberg reported on April 21 that Musk considered reducing Tesla’s workforce by up to 20% to align with the recent decline in quarterly vehicle deliveries. Musk’s memo to employees indicated a stringent approach to headcount and cost management. He warned Tesla executives that they might need to resign if they retained staff who did not meet stringent performance standards.

The immediate fallout from Musk’s decision was palpable. Major automakers like General Motors, Ford, and Mercedes-Benz, which have adopted Tesla’s charging technology, were left in a difficult position due to the abrupt dissolution of the Supercharger division.

Investors and partners expressed frustration over the sudden move and the lack of communication from Tesla. Aaron Luque, CEO of EnviroSpark, which installs Tesla chargers, voiced concerns about the disruption and the absence of formal communication from Tesla.

The backlash likely influenced Musk’s swift reversal. To mitigate concerns, Musk assured stakeholders that the Supercharger network would continue to expand, albeit with a greater focus on ensuring 100% uptime and enhancing existing locations rather than rapidly opening new ones. In an April 30 post on social media platform X, Musk reaffirmed Tesla’s commitment to growing its Supercharger network.