Tesla Closing a Silicon Valley Office

As part of its attempts to shrink its personnel and save money, Tesla informed employees on Tuesday that its San Mateo, California, office will be closing and 200 positions would be lost there. The workers at the San Mateo facility had helped to enhance Tesla Autopilot advanced driving assistance technology.

People with knowledge of the situation claim that more than half of the employees at that office received termination notices. The remaining workers will move to a different office. Despite CEO Elon Musk declaring in an interview last week that he expects to increase hourly workers but slash 10% of the salaried workforce, the majority of the positions removed were occupied by hourly employees.

The action was taken after Musk expressed his “very awful feeling” about the state of the economy. According to Reuters, Musk instructed his staff to “stop all recruiting worldwide.” In light of rising worries about a potential recession, Musk issued his edict. According to Musk, Tesla new facilities in Texas and Germany are losing “billions of dollars,” in part because the business is unable to raise output at either location due to supply chain concerns.

Musk noted that the plants in Austin and Berlin are currently acting as enormous money furnaces. “It should sound like a huge roaring boom, like money on fire. Since COVID-19 first appeared two years ago, supply chain failures have been particularly crippling for automakers, who rely on parts from all over the world. Automakers’ issues were made worse by a shortage of computer chips required to power automobiles’ computers, which drove up the cost of both new and used vehicles.