Electric car manufacturer, Tesla has just fired somewhere between 400 and 700 employees last week, citing a former employee and local news reports. Those fired by the company reportedly included factory workers, managers and supervisors. Tesla indicated in an emailed statement to Reuters that the dismissals were the result of an annual companywide review but did not confirm just how many had been forced to leave the automaker. Tesla also stated in emails to a number of news outlets that it had immediate plans to fill every vacancy that was created. In total, Tesla has around 33,000 employees.
As soon as news of the mass firings broke, some news outlets linked the company’s move to assembly issues that have affected the Model 3’s pace of production during this quarter — just 260 cars out of a planned 1,500. Tesla responded that the firings were not linked to production pace issues with the Model 3, but the company did not state whether those let go were distributed evenly among the model lines as well as its SolarCity subsidiary or whether most had been involved with the Model 3.
Production of the Model 3 began in July 2017, and at the time, Tesla planned a significant ramp up by the end of 2017 and further production acceleration in 2018.
Musk denies Model 3 ‘hand built’ claims with a production line video:
“Based on our preparedness at this time, we are confident we can produce just over 1,500 vehicles in Q3 and achieve a run rate of 5,000 vehicles per week by the end of 2017,” Tesla said in its Q2 report this year. “We also continue to plan on increasing Model 3 production to 10,000 vehicles per week at some point in 2018.”
Model 3 assembly, by Tesla’s own admission, has been experiencing “production bottlenecks,” but the company also noted that production of other models had outperformed 2016 production totals for the same period.
“Model 3 production was less than anticipated due to production bottlenecks,” the company said in a rare statement addressing the issue. “Although the vast majority of manufacturing subsystems at both our California car plant and our Nevada Gigafactory are able to operate at high rate, a handful have taken longer to activate than expected.”
Production bottlenecks typically occur due to unavailable components, if the manufacturing process itself is proceeding without greater issues such as component incompatibility or significant fit and finish issues. The automaker has not elaborated on which issues were keeping Model 3 production at such a slow pace, given the fact that prior plans estimated that production would reach 5,000 cars per week by December 2017. Tesla has not indicated whether it still expected to hit the 5,000 car per week target by December.
In either case, Tesla has some 450,000 Model 3 reservations to fill — and between 400 to 700 fewer folks now to fill them.