According to an ex-employee who was involved in Tesla's delivery operations, and a current employee who works for Tesla in Fremont, the layoffs appear to have impacted workers across every department and region from factory workers to recruiters and receptionists. But deep cuts apparently hit Tesla's delivery, sales and Model S and X production teams.
Laid off workers from the company's battery plant near Reno, Nevada, and car plant in Fremont, California, as well as one of its delivery centers, say they were walked out by security or by their managers on Friday, some after working a full shift.
At least a half-dozen security professionals were let go from "GF1," in a continued re-configuration of that department following the departure of Jeff Jones last year.
A current Tesla employee in Fremont said that Model 3 production staff and software engineers seemed least likely to be cut. This person also said that in recent weeks, Tesla moved a handful of workers from the group that makes Model S sedans and Model X SUVs in Fremont into new shifts, or new positions involved in Model 3 production or logistics.
As part of its restructuring and cost-cutting measures, Tesla eliminated nighttime production of Model S and X vehicles, according to a laid off employee familiar with the matter. The company let go of at least a half-dozen maintenance techs on the night shift there, and moved others into a day shift, this person said.
A Deutsche Bank analyst, Emmanuel Rosner, wrote in a note to investors on Friday: "We think the job cuts are mostly driven by efficiency gains in manufacturing and continued opex discipline to ultimately enable profitability on the entry level Model 3."
A former Tesla engineer agreed that the company made significant improvements to its Model 3 production process in recent months. But Tesla has long debated whether or not it should "sunset" either the Model S or X, or move production of these vehicles out of the crowded Fremont factory, this person added, noting there is no "upgrade" team in place to refresh either the S or X yet.
A Tesla spokesperson said:
"We recently announced that we are no longer taking orders for the 75 kWh version of Model S and X in order to streamline production and provide even more differentiation with Model 3. As a result of this change and because of improving efficiencies in our production lines, we have reduced Model S and X production hours accordingly. At the same time, these changes, along with continuing improvements, give us the flexibility to increase our production capacity in the future as needed. We'll be providing more details on our earnings call next week."