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Tesla fires hundreds of employees while trying to ramp up vehicle production, says report

Elon Musk

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Elon Musk

Tesla is firing hundreds of employees, the San Jose Mercury News first reported on Friday.

The news followed annual reviews at the company, and was revealed just one day after Tesla announced a recall impacting 11,000 of its Model X SUV’s worldwide. The recall concerned rear seats that may fail to lock safely in place in the vehicles.

The Mercury News reported that the dismissals were not classified as layoffs, but were performance-related. Most of those fired were in sales and administrative roles not manufacturing and engineering. The report says betwen 400 and 700 people were fired. The company’s Fremont, California manufacturing plant has more than 10,000 workers.

A Tesla spokesperson sent a statement to CNBC saying:

“Like all companies, Tesla conducts an annual performance review during which a manager and employee discuss the results that were achieved, as well as how those results were achieved, during the performance period. This includes both constructive feedback and recognition of top performers with additional compensation and equity awards, as well as promotions in many cases. As with any company, especially one of over 33,000 employees, performance reviews also occasionally result in employee departures. Tesla is continuing to grow and hire new employees around the world.”

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