Tesla closes a Silicon Valley office and lays off 200 employees

Tesla told employees Tuesday it was closing its San Mateo, California office and cutting 200 jobs there as part of the electric vehicle manufacturer’s efforts to cut its workforce to save money.

Staff at the San Mateo office had helped improve Tesla’s advanced driver assistance system, or Autopilot. According to acquaintances, more than half of the employees of that office were told that their jobs would be cut. The remaining employees will be transferred to another office, according to the Wall Street Journal.

A Tesla charging station in a Tesla showroom bears the manufacturer’s logo. (Christophe Gateau/Photo Alliance via Getty Images / Getty Images)

Bloomberg previously reported on Tesla’s plan to close the factory. Most of the eliminated jobs were taken by hourly workers, despite CEO Elon Musk saying in an interview last week that he plans to add hourly workers but cut 10% of wages.

The move comes after Musk warned that he had “a really bad feeling” about the economy. Reuters reported that Musk instructed his executives to “suspend all hiring worldwide”. Musk’s directive comes amid growing concerns about a potential recession.

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Tesla car

A Tesla vehicle drives past a Tesla factory. (REUTERS/Stephen Lam/Reuters Photos)

Musk recently said Tesla’s new plants in Texas and Germany lost “billions of dollars,” in part because of supply chain issues that impacted the company’s ability to increase production at each plant.

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“Both factories in Berlin and Austin are huge money kilns right now,” Musk said at the time. “It should be like a giant roaring sound that’s the sound of money on fire.”

Elon Musk at the Metropolitan Museum of Art

Elon Musk attends the Metropolitan Museum of Art’s benefit gala to mark the opening of the “In America: An Anthology of Fashion” exhibit on May 2 in New York. (Evan Agostini/Invision/AP/AP Newsroom)

Supply chain failures since the beginning of COVID-19 two years ago have been especially grueling for automakers, who get parts from all over the world. A lack of computer chips needed to run cars’ computers exacerbated car manufacturers’ problems and sent used and new car prices skyrocketing.

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Tesla recently sharply raised prices for its fleet and the company’s shares have lost 38% of their value in less than three months.

According to SEC filings, Tesla and its subsidiaries employed nearly 100,000 people by the end of 2021.

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