# Layoffs question



## Tom Hudson (Dec 20, 2017)

Just heard the news about Tesla layoffs this morning. Any idea where those are coming from? I mean it wouldn't make sense to take people off the production line, and given the apparently sad state of Support lately (see Rich Rebuilds' utter cluster-cuss trying to buy a used Model X on YouTube), I think punting support staff would be a huge mistake... who might they be letting go?


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## Jayc (May 19, 2016)

Tesla has made very little in the way of 'mistakes' if you think about it so I'm quite certain this is a properly considered restructure plan. It is also a chance for Tesla to increase headcount to address curreent bottlenecks so overall it should work out well.


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## MelindaV (Apr 2, 2016)

they did the same last year. Like many other large businesses, I think they will annually remove the lower x% of employees and bring in new. It may not sound great, but from a business perspective, it isn't all that bad either. When it is known this happens each year, it identifies employees to do their best. 
I've worked places where there were co-workers who were crap employees, and they were there year after year dragging everyone else down, and making the others wonder why that person was not fired.


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## Ed Woodrick (May 26, 2018)

They did it to SpaceX last week. These are just general across the board efforts


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## ADK46 (Aug 4, 2018)

What Musk didn't say is that after those 7% are laid off, the next lowest 3% are sent to work at the Tesla Store. Something similar happens in the management ranks, too.


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## TrevP (Oct 20, 2015)

We spoke about this on the last podcast. Manufacturing tends to remain unaffected unless they have some automation to handle the losses. Most of the layoffs occur in sales departments. Tesla doesn't have a demand problem so why have extra sales people, what they do need though is more CUSTOMER support. As you can image I get my share of stories from dissatisfied buyers who had delivery issues or complete lack of communication from the Tesla people.

If they're going to be a "big boy" company they really need to fix this problem ASAP otherwise they risk losing customers from others who will say the car is great but the other stuff fails miserably. Tesla is doing everything possible to stay afloat and while it hurts to see service take the brunt of these actions they really need to focus on WHO they hire.
They seem to have a propensity to hire people who are into their "mission" and while I find that noble it's not the best choice. They need to hire veterans of the auto service industry. Hire people from high-end dealerships, not kids off the street.


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## ADK46 (Aug 4, 2018)

I tried to find the name of Tesla's VP of Customer Service or the equivalent this week. I saw a reference to someone who left last year, but not a current person, or even a listed position. Is there one? Anyone want to volunteer?


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## JasonF (Oct 26, 2018)

A lot more companies downsized in Dec/Jan than Tesla. GM closed entire factories and laid off thousands. Verizon shut down entire divisions.  I'm actually more concerned about what's coming economically than a handful of people let go by Tesla, it looks a lot like these companies might know something we don't.


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## Karl Sun (Sep 19, 2018)

JasonF said:


> GM closed entire factories and laid off thousands.


 GM (guaranteed misery) has been doing this for *decades*.


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## garsh (Apr 4, 2016)

__ https://twitter.com/i/web/status/1086398237601423360


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## Midnit3 (Oct 8, 2017)

ADK46 said:


> I tried to find the name of Tesla's VP of Customer Service or the equivalent this week. I saw a reference to someone who left last year, but not a current person, or even a listed position. Is there one? Anyone want to volunteer?


I'll do it!


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## masto (Nov 11, 2018)

MelindaV said:


> they did the same last year. Like many other large businesses, I think they will annually remove the lower x% of employees and bring in new. It may not sound great, but from a business perspective, it isn't all that bad either. When it is known this happens each year, it identifies employees to do their best.
> I've worked places where there were co-workers who were crap employees, and they were there year after year dragging everyone else down, and making the others wonder why that person was not fired.


No sane company does this (commonly known as "stack ranking") any more. People quickly realized that the best way to survive rank and yank is to make your coworkers look bad, play politics, and cut deals. One thing it does not do is incentivize anyone to do their best work, and top talent will avoid your company like the plague.


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## SR22pilot (Aug 16, 2018)

masto said:


> No sane company does this (commonly known as "stack ranking") any more. People quickly realized that the best way to survive rank and yank is to make your coworkers look bad, play politics, and cut deals. One thing it does not do is incentivize anyone to do their best work, and top talent will avoid your company like the plague.


Do you have data to back this up or is it just personal opinion? I expect it is the latter. Studies show the Jack Welch method works well for about 3 to 5 years. After that the benefits go away. The new people coming in aren't any better than the people already there and there is all of the downsides of integrating new employees.

As far as my opinion, if cuts are done every now and then as companies become bloated it has little negative impact on quality employees or morale. In a high performing organization, people like being around other high performers. They know when people are poor and seeing those people go doesn't frighten them. It actually makes them feel better about the future of their organization. The problem is when good people are cut due to mismanagement or lazy management. People lose faith in management and good people worry that excellent performance won't protect them.


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## ADK46 (Aug 4, 2018)

Ah, Jack Welch. At GE, I had to participate in "paired comparisons" - who would you rather keep, John or Mary? Go through the roster, perform enough iterations, and someone winds up on the bottom of the totem pole. The first few times, that person probably should leave. Then it's not. Brutal. I got out of management, since "span" became a thing. I later quit to pursue a second career, but didn't tell anyone. Took GE a few years to figure it out. 

But that was in the environment of reductions, not increases. When you're hiring like crazy, I suspect there are always good candidates for leaving. I'd lay off the bottom 100% of customer service people, starting with the managers.


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## SR22pilot (Aug 16, 2018)

ADK46 said:


> Ah, Jack Welch. At GE, I had to participate in "paired comparisons" - who would you rather keep, John or Mary? Go through the roster, perform enough iterations, and someone winds up on the bottom of the totem pole. The first few times, that person probably should leave. Then it's not. Brutal. I got out of management, since "span" became a thing. I later quit to pursue a second career, but didn't tell anyone. Took GE a few years to figure it out.
> 
> But that was in the environment of reductions, not increases. When you're hiring like crazy, I suspect there are always good candidates for leaving. I'd lay off the bottom 100% of customer service people, starting with the managers.


My entire organization eventually wound up ranked each year. It was very helpful. I would do a linear curve fit. Generally the top curved up above the line. I was happy with that. Those guys often had skills only a few people in the world had. The bottom rarely curved down. Often what I had was a dip with the 3 to 5 year guys. I would use that to show why there was a need for a special raise since new college grad salaries were rising faster than their's had. I also looked for anomalies. A guy well below the line needed a big kick up. A guy way above the line (except at very top) was someone to keep an eye on. It generated a low raise and I would look over a few years to see if it was a pattern. It was common to have a 3 to 5 year post college guy up with 10 and 15 year engineers. It was usually an indication that he was a rising star that needed to be watched, nurture and compensated accordingly. The process helped prevent the quiet overachiever from being over looked. If a layoff occurred it wasn't used to automatically cut the bottom guys. They might be new college grads ranked there due solely to lack of experience. It did help management see the people who were not growing and who were being passed by.


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## masto (Nov 11, 2018)

SR22pilot said:


> Do you have data to back this up or is it just personal opinion?


https://en.wikipedia.org/wiki/Vitality_curve
https://www.retaildive.com/news/ama...rank-and-yank-employee-review-program/430426/
http://fortune.com/2013/11/18/microsoft-ge-and-the-futility-of-ranking-employees/
https://www.theatlantic.com/business/archive/2014/01/the-case-against-performance-reviews/283402/
https://www.strategy-business.com/article/00275?gko=c442b


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## garsh (Apr 4, 2016)

Tesla competitors are opening their doors to former employees affected by layoffs

Well done by these other companies. Not taking jabs at Tesla, just honestly interested in the talent.


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