Elon Musk needs to cut one in ten jobs at Tesla. Some may already have their eyes on the exit.
The Tesla chief executive’s intentions, in an internal email seen by Reuters, are what he described as his “super bad feeling” about the US economy.
Some of the nearly 100,000 people employed at the electric car maker may already be considering their options after Musk issued an office-to-office ultimatum this week.
In an email sent to employees Tuesday night, Musk threatened to fire anyone who didn’t work in the office 40 hours a week, contrary to the flexibility offered by Big Tech companies that tend to have equal talent pools. compete.
The office order on top of the massive drop in Tesla’s share price this year — partly due to Musk’s costly pursuit of Twitter — and his public alignment with the Republican Party are a toxic mix for some employees.
“Tesla is starting its local great resignation,” said Nicholas Bloom, a Stanford University economics professor who predicted that 60 percent of employees would return to the office full time, about 10 percent would quit, and about 30 percent another. Will look for it.” Work.
Tesla did not immediately respond to a request for comment.
Some tech companies swooped in, sensing an opening.
Scott Farquhar, Australia’s third-richest man and co-founder of software maker Atlassian, tweeted about the expansion and flexibility it plans to offer. “Any Tesla employees interested?” He added.
In the wake of the COVID-19 pandemic, more and more tech workers, who used to have work from home or hybrid policies, are refusing to return to the office full time.
A former Tesla engineer told Reuters he recently took a job at Alphabet because of a lack of work-life balance, including pressure from coming into the office during the pandemic. While at Google, he only has to come to the office three times a week, some of his team members work remotely, he said.
He added that his friends who work from home are “no less productive, but much happier.”
Another former Tesla engineer said he was under pressure to work in the office during the pandemic in 2020 and got COVID-19 twice before moving to Apple.
large stock compensation
The threat of layoffs and a return order comes as Tesla engineers are seeing their stock-based compensation decline. Tesla faces some of the same problems that other companies attack, such as China’s lockdowns.
But investors are also concerned that Musk’s $44 billion search for Twitter is dissuading them, despite Musk’s contention that he spends relatively little time on it.
Tesla stock fell nine percent on Friday after Reuters published its staff cut plan and Twitter said the Musk acquisition had passed a US antitrust review. The stock was down nearly 30 percent since Musk announced the purchase of the shares in early April, nearly twice the decline of the Nasdaq index.
“If this persists, they’re going to have a whole lot of retention problems. You’ve got two things happening. You’ve got Elon Musk saying things that are controversial and not everyone likes. And you’ve got to stock up. The price has taken a big hit,” said Michael Solomon, founder of compensation negotiation advisory service 10x Ascent.
Stock options account for a larger share of executive compensation at Tesla than its peers, the company said in its securities filing this year. When the shares don’t go up, that portion of the compensation can become worthless.
Tesla employees receive annual bonuses in the form of stock, and generally less cash salaries than peers at large tech companies, as provided by former and current employees and job sites Blind and Glassdoor to Reuters. according to the data.
Tatiana Baker, who runs NIAH Recruiting, a recruitment firm for startups, recently did an email marketing campaign for Tesla employees and received responses from 14 percent, compared to the typical top rate of 10 percent.
To be sure, Musk’s flamboyant personality has helped build the Tesla brand, allowed it to expand without marketing, and gave many employees a sense of mission tied to the man and his climate goals.
“Long hours and inappropriate working conditions are the norm for some people,” said a former Tesla engineer.
And other tech companies are cutting jobs or slowing or halting work amid weak demand, potentially reining in some Tesla employees’ willingness to jump ship.
But Musk’s recent embrace of a new partisan political identity is off-putting to some employees, especially liberal tech workers in Silicon Valley.
“He’s a very polarizing guy. You either love that guy or you hate that guy,” said Will Hunsinger, CEO of Riviera Partners’ recruiting company.
“Some people are huge fans, and they would do anything to work for one of their companies. And others would say, like, I really don’t agree with their way of running the company.”
The billionaire has tapped his big Twitter handle to attack Democratic lawmakers, used his bid to champion free speech for the microblogging platform, including a pledge to restore former President Donald Trump’s account, and he Said he would vote Republican.
“There are people to whom it is very distasteful,” said recruiter Solomon. “These are people who have a lot of choices about their employment options.”
Many Tesla employees will wait for the stock to recover, said a former Tesla manager, who described the stock awards as “golden handcuffs” that keep employees from leaving. “But if they think Tesla’s stock price will remain low, they’re more likely to leave: their big bonus isn’t that big anymore.