Tesla lays off almost half its global recruiting team in attempt to cut costs

Earlier today, Tesla has laid off half of its global recruiting team in an attempt to cut costs, according to people familiar with the matter talking with Electrek.

In recent weeks, Tesla has embarked in some controversial cost-saving moves, like closing stores and slashing retail employee compensation.

Now Electrek has learned that the automaker also conducted an important round of layoffs in its global recruiting team today.

According to sources, Tesla has fired roughly half of its global recruiting team or about 150 people.

(Update: After publishing the story today another source told us the number was closer to a third of the recruiting staff)

They were given notice today as well as a severance package based on how long they were working at the company. Several employees fired were longtime Tesla recruiting and senior staff.

Tesla is obviously expected to slow down its retail recruiting effort, which previously involved thousands of hires as they were opening new stores, but many of the layoffs today had nothing to do with retail recruiting.

Some employees were told that today’s layoffs were done in an effort to cut costs.

A Tesla spokesperson has declined to comment on this report.

Last year, Tesla reported that it had grown to over 45,000 employees, but the headcount is expected to be down significantly now after already having several rounds of layoffs in 2019.

Earlier this week, Tesla CEO Elon Musk said that the company would reverse some of its effort to transition sales online and close stores, but it would have to partially increase prices back to where they were before the previous announcement.

Electrek’s Take

It makes sense that Tesla would reduce its recruiting staff if they don’t plan on hiring more retail employees, which was a big part of their responsibilities, but they also fired people who had nothing to do with that.

We heard of senior staff who had been part of Tesla’s recruiting for a long time being let go today.

I have to say that some of those recent moves are making me nervous for Tesla.

The recent price changes basically resulted in important temporary discounts to generate demand and the online-only sales strategy appeared to be an excuse to massively cut employee retail compensation.

Now they are slashing their recruiting team, which will undoubtedly result in a significant slow down in headcount growth.

That’s difficult to reconcile with a company that is talking about hiring thousands of production workers to build several new vehicle programs (Model Y, Tesla Semi, Tesla Pickup) in the next few years, and significantly increasing its service staff to improve service coverage for owners around the world.

What do you think? Let us know in the comment section below.