The largest job cut in Tesla’s history turned out to be a surprise and misstep, as CEO Elon Musk took the blame for errors in severance packages. Based on an email received by Bloomberg News, Musk admitted that some of the packages offered to those sacked were “incorrectly low,” and then he apologized for it. The email vowed prompt amendment, an unusual display of remorse from the ordinarily self-assured CEO.
On the other hand, this apology is being made in the midst of Tesla’s crisis. In response to what the company said is a decline in demand for EVs, the announcement made by the firm indicated it had ordered a retrenchment that will see its workforce reduced by more than 10% across all markets. Meanwhile, the layoffs themselves occurred quickly and without regard to who was leaving; a group that included former production supervisor Nico Murillo, who wrote on social media about his disbelief at being told he could not even enter the factory after returning from vacation until he handed over his security pass.
The resignation of Senior Vice President Drew Baglino coincided with these widespread layoffs, which could reach up to 20% in some departments. The timing of Baglino’s resignation raises concerns about the internal dynamics at Tesla during this era of upheaval, even though the reasons for his leave are yet unknown.
Although the precise number of workers impacted by the defective severance payouts is uncertain, the event complicates Tesla’s existing problems even further. Musk’s statement appears to be an effort to allay staff worries and maybe avoid legal ramifications. It is unclear, though, how this incident would affect Tesla’s standing as a leading developer in the electric vehicle market as well as its connection with its employees.