Firings of 700 may hurt Tesla’s image
Frank Morales joined Tesla about four years ago, eager to work for a growing company.
Morales handled the aggressive deadlines of the Tesla warehouse — until last month. He said he received years of strong performance reviews but was fired one day “with no warning.”
A friend and a cousin recently asked him if they should go to work for the automaker.
“I told them no,” Morales said. “Stay where you’re at.”
Tesla’s dismissal of 700 workers in October has former employees angry and outspoken. Some, like Morales, have refused to a sign a separation agreement they feel is unfair and restrictive. The agreement bars former employees from disparaging the company or the executives who fired them, according to a copy obtained by the Mercury News.
California-based Tesla also faces protests, lawsuits and federal complaints from former workers and workers seeking to unionize, and it is again aggressively defending its image.
The disruptions come as the company battles the enormous task of hiring, training and expanding a skilled workforce to produce a new vehicle — the delayed, lower-cost Model 3 — that is important to its success and survival.
Experts in human resources and employment law say the abrupt dismissals and upheaval could have lasting consequences for the Tesla brand and the company’s ability to attract talented engineers and factory workers.
Sanjay Sathe, CEO of placement support agency RiseSmart, said companies need to plan terminations “very, very carefully, because it’s about people.” The former workers could be future customers or even rehired as production demands increase, Sathe said. And bad word-ofmouth reviews can spread quickly on social media.
CEO Elon Musk acknowledged for the first time this month that the company had fired 700 employees, saying it was for poor performance. Tesla sets high work standards, he said, because it must be better than its bigger competition.
“They’re high because, if they’re not high, we will die,” Musk said.
He complained that the October terminations became public and added that journalists should “be ashamed” for writing about a turnover of 2 percent of the public company’s employees.
The company also shot back at critics questioning its treatment of workers, who have raised concerns about lax worker safety rules and low pay. Gaby Toledano, Tesla’s chief people officer, wrote an oped in the Sacramento Bee touting the company’s employee stock program and innovative environment. The company lists more than 2,500 open positions on its job board.
Tesla says workers remain attracted to the automotive and clean-tech company. A company spokesman said Tesla received more than 73,000 applications worldwide in October, a 16 percent increase from January.
Any suggestion that the firings would hurt Tesla hiring in the long term, the company said, “is purely speculation.” The company’s stock price hit record highs this year but has fallen in recent weeks.