Tesla fires hundreds of employees while trying to ramp up vehicle production

Key Points
  • Tesla is firing hundreds of employees even as the company aims to ramp production of its electric vehicles.
  • The news comes one day after Tesla announced a recall affecting 11,000 SUVs.
Tesla fires hundreds of employees while trying to ramp up vehicle production

Tesla confirmed it is firing hundreds of employees after completing its annual performance reviews, even though the electric automaker is trying to ramp up production to meet the demand for its new Model 3 sedan.

The Palo Alto, California-based company confirmed the cuts on Saturday, but didn't disclose how many of its 33,000 workers were jettisoned. The San Jose Mercury News interviewed multiple former and current Tesla employees who estimated 400 to 700 workers lost their jobs.

The news followed annual reviews at the company, and was revealed just one day after Tesla announced a recall of 11,000 Model X SUVs worldwide, saying rear seats may fail to lock safely in place.

The Mercury News reported that the dismissals were not classified as layoffs, but were performance-related. Most of those fired were in sales and administrative roles not manufacturing and engineering. The report says 400 to 700 people were fired. The company's Fremont, California, manufacturing plant has more than 10,000 workers.

A Tesla spokesperson sent a statement to CNBC saying:

"Like all companies, Tesla conducts an annual performance review during which a manager and employee discuss the results that were achieved, as well as how those results were achieved, during the performance period. This includes both constructive feedback and recognition of top performers with additional compensation and equity awards, as well as promotions in many cases. As with any company, especially one of over 33,000 employees, performance reviews also occasionally result in employee departures. Tesla is continuing to grow and hire new employees around the world."

The Associated Press contributed to this report.