Tesla Layoffs 2019: Elon Musk Fires More Staff To Start Q2

The vexed issue of staff firings has come back to haunt Elon Musk and Tesla Inc. at a time when the company remains bent on boosting online orders but at the cost of firing sales staff.

The company’s sales team has again been the victims of the new round of firings at the start of Q2, with several dozen sales team members being dismissed last week in Chicago; Brooklyn, New York; and Tampa, Florida.

Tesla confirmed the firings but refused to discuss specifics such as the number of personnel let go. The firings are part of Tesla’s “retail retrenchment strategy” announced in February.

The cuts affected team members of the company’s inside sales teams, whose job is to reach-out to potential customers and invite them to test drive cars. Those that remained were reassigned to tasks such as taking inbound calls, helping with deliveries and washing and detailing vehicles, sources told Bloomberg.

This newest round of staff reductions were the subject of memos written by Musk and emailed to staff. In these memos, the latest of which was sent-out late March, the Tesla CEO said the decision to close showrooms and embrace an online-only ordering model is meant to save money.

Tesla needs all the money it can get to boost production of cheaper Model 3 all-electric sedans while prepping to launch new models such as the Model Y crossover in 2020.

What’s left of Tesla’s sales teams are those in three locations. Tesla still has inside sales teams in Fremont, California and Las Vegas.

Sales team members that talked to media complained about the suddenness of their dismissals last week. The 22 members of the sales team in Tampa said they learned of the firings only when they had been fired. These employees were informed of the firings via conference call and learned their firings were effective immediately.

In late March, Musk tried to sort out the chaos and demoralization among staff he caused with two conflicting announcement he made since February about firing sales staff, closing showrooms and limiting orders for Tesla vehicles to the internet.

In another memo to Tesla staff on March 27, Musk explained the rules that will govern firing employees and closing stores. Musk triggered a hornet’s nest-worth of pain with a memo at the start of March by announcing Tesla will start closing almost all of its retail showrooms in the coming weeks, and fire employees after a review of its sales and marketing effort.

Tesla informed employees at over two dozen showrooms they should call their clients to reschedule test drives and appointments to other stores because their showrooms are being closed down. Most of these stores are in California but Tesla refused to reveal which stores are being closed.