Business & Economy

Tesla Motors fires hundreds of workers

Tesla Motors unveiled the new lower-priced Model 3 sedan at the Tesla Motors design studio Thursday, March 31, 2016, in Hawthorne, California. It doesn't go on sale until late 2017, but in the first 24 hours that order banks were open, Tesla said it had more than 115,000 reservations.
Tesla Motors unveiled the new lower-priced Model 3 sedan at the Tesla Motors design studio Thursday, March 31, 2016, in Hawthorne, California. It doesn't go on sale until late 2017, but in the first 24 hours that order banks were open, Tesla said it had more than 115,000 reservations.
Justin Prichard/AP

Tesla Motors fired hundreds of workers after completing its annual performance reviews, even though the electric automaker is trying to ramp up production to meet the demand for its new Model 3 sedan.

The Palo Alto, California-based company confirmed the cuts in a Saturday statement, but didn't disclose how many of its 33,000 workers were jettisoned.

The San Jose Mercury News interviewed multiple former and current Tesla employees who estimated 400 to 700 workers lost their jobs.

The housecleaning swept out workers in administrative and sales jobs, in addition to Tesla's manufacturing operations.

In its official statement, Tesla said:

"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."

An unspecified number of workers received bonuses and promotions following their reviews, according to the company.

Tesla is under pressure to deliver its Model 3 sedan to a waiting list of more than 450,000 customers. The company so far has been lagging its own production targets after making just 260 of the vehicles in its last quarter.

Including other models, Tesla expects to make about 100,000 cars this year. CEO Elon Musk is aiming to increase production by five-fold next year, a goal that probably will have to be met to support Tesla's market value of $59 billion — more than Ford Motor Co.

Unlike Ford, Tesla still hasn't posted an annual profit yet.

Despite the mass firings, Tesla is still looking to hire hundreds more workers.