Elon Musk clarifies that Tesla layoffs are just for salaried employees, still hiring hourly workers

Elon Musk has clarified that Tesla laying off 10% of its workforce only applies to “salaried employees,” and that the automaker is still hiring hourly workers.

Earlier today, we reported on Elon Musk telling Tesla executives in an email that they need to cut 10% of the workforce and pause hiring due to having a “super bad feeling” about the economy. Now, the CEO has decided to clarify the Tesla layoffs in an email to all employees.

Musk clarified that the 10% reduction in headcount only applies to “salaried employees”:

Tesla will be reducing salaried headcount by 10% as we have become overstaffed in many areas.

The automaker plans to still hire hourly employees, which mainly consists of service and sales workers, factory workers, and people installing solar and home battery packs.

Musk added in the email:

Note, this does not apply to anyone actually building cars, battery packs or installing solar. Hourly headcount will increase.

Tesla has now over 100,000 employees worldwide, and it had over 5,000 open positions prior to the layoff announcement. Many of the open roles are at Tesla’s growing factories, especially Gigafactory Berlin and Texas.

Here’s the email in full:

Headcount Reduction

Tesla will be reducing salaried headcount by 10% as we have become overstaffed in many areas.

Note, this does not apply to anyone actually building cars, battery packs or installing solar. Hourly headcount will increase.

Elon

Electrek’s Take

This new email is more aligned with what we discussed this morning, specifically that Tesla has hired many people during the pandemic, and that is creating some problems right now.

Firstly, it literally cannot support having all those people at its offices, which might be why Musk announced the stop of remote work. It will facilitate layoffs – some people will just quit.

Secondly, when you hire 15,000-20,000 people over a year, you will inevitably have inefficiencies and a round of layoffs to balance things out, which is not out of the ordinary after such mass hiring.

Of course, Musk also stated to execs that he is worried about the economy, which led to Tesla’s stock falling more than 8% this morning. He didn’t mention that in the email for all employees, which he knew would leak.

Instead, he says that it is due to Tesla being “overstaffed in many areas,” which as I discuss above is likely true, but both can be true at once.

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