Employment

Tesla Cutting an Average Of 2,700 Jobs in Austin and 3,300 In California as a Part of Restructuring

Tesla has been noted to eliminate more than 3,300 jobs across the state of California and an average of 2,700 jobs in Austin, Texas. This is according to Worker Adjustment and Retraining Notification (WARN) Act letters and notices filed in both states.   

The layoffs are considered a greater restructuring plan that shall be conducted by the electric vehicle maker. In 2021, Elon Musk, CEO of Tesla, moved the organization’s corporate headquarters to Austin from Palo Alto, California.   

Musk stated a personal memo last week was passed that Tesla will be cutting more than 10% of its global headcount as the EV maker with flagging sales and increased competition. However, he had never mentioned which departments or locations would be most affected by this action.   

Tesla had hired 140,473 people by December 2023. Tesla officially opened its Texas EV and battery factory in April 2022 with a “cyber rodeo” party. Now, the company manufactures some of its Model Y crossover utility vehicles in Austin and has started to build its Cybertruck there.   

Based on Tesla’s submissions with the Texas Department of Licensing and Regulation, the distribution of the funds earmarked for setting up larger production facilities in the Austin area covers cell testing and battery manufacturing, cathode and drive unit manufacturing, plus a dive shop, among other things.  

As indicated by Tuesday’s WARN filings, “there is no union that represents any of the employees and the employees don’t have a bumping right,” or the right of more senior workers to replace those with less seniority.  

The cuts made in California amounted to a workforce of 2,266 people in Fremont, which is where Tesla’s first U.S. vehicle assembly plant is located, as well as a workforce of 486 employees in Palo Alto, where Tesla’s engineering headquarters is. The layoffs impacted staffers from the factories, engineering offices, stores, showrooms, and servicing stations scattered around the state.  

 Jobs are the primary casualties in Burbank and Lathrop, as is the case of the foundry where spare parts are made and the assembly plant that puts together Megapack and battery energy storage systems.  

Executives are expected to discuss the restructuring on the company’s quarterly earnings call at 5:30:00 PM Eastern.

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Nilanjana Basu
Nilanjana is a lawyer with a flair for writing. She has a certification in American Laws from Penn Law (Pennsylvania University). Along with this, she has been known to write legal articles that allow the audience to know about American laws and regulations at ease.

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