Tesla told employees Tuesday that it will close its San Mateo, Calif., office and cut 200 jobs there as part of the electric-vehicle maker’s effort to reduce its workforce to save money.
The San Mateo office staff had helped improve Tesla’s advanced driver assistance system, or Autopilot. According to people familiar with the matter, more than half of the staff at that office have been informed that their jobs will be cut. The remaining employees will be moved to another office, according to the Wall Street Journal.
Bloomberg previously reported on Tesla’s plan to shut down the facility. Most of the jobs cut were filled by hourly workers, although CEO Elon Musk said in an interview last week that he plans to hire hourly workers but cut 10% of the workforce.
The move comes after Musk warned he had a “super bad feeling” about the economy. Reuters reported Musk told his executives to “pause all hiring worldwide.” Musk’s policy comes amid growing concerns about a potential recession.
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Musk recently said that Tesla’s new factories in Texas and Germany were losing “billions of dollars,” in part due to supply chain issues that were affecting the company’s ability to ramp up production at each facility.
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“Both the factories in Berlin and in Austin are huge money ovens right now,” Musk said at the time. “It should be like a huge roaring sound, which is the sound of money on fire.”
Supply chain failures since the beginning of the COVID-19 two years ago were particularly debilitating for automakers, which source parts from all corners of the world. A shortage of computer chips needed to run car computers exacerbated automakers’ problems, sending used and new car prices skyrocketing.
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Tesla recently raised prices across its entire fleet, and the company’s stock has lost 38% of its value in less than three months.
According to the SEC filing, Tesla and its subsidiaries employed nearly 100,000 people at the end of 2021.