Tesla cuts 7% of its workforce to boost Model 3 production; Musk says 'very difficult' road ahead

Tesla cuts 7% of its workforce to boost Model 3 production; Musk says 'very difficult' road ahead

avesraggiana | 18. Januar 2019

Ouch. Wait times on the phone are already approaching an hour, and responses to emails are spotty and disjointed.

This news does not bode well for Tesla improving their post-sale customer service.

NoMoPetrol | 18. Januar 2019

@avesraggiana You are assuming that the cuts are going to be in the customer service area. They just opened up a whole new batch of retail outlets complete with lease commitments which, combined with the emphasis of his press release, indicates to me that the layoffs will be centered on the manufacturing side.

He referenced an unsustainable 30% growth in the work force last year, and immediately started discussing improving manufacturing efficiencies. So, we will wait and see.

jordanrichard | 18. Januar 2019

The wait times are exasperated by owners not reading their owners manuals and reading posts on line about how increased energy usage in the winter is normal!!!!!

Now, I will also ad, it was Tesla's "5 minute" delivery process for all of the 3s that has added to this as well. When we took delivery of our S in 2014, the DS spent upwards of an hour with us. So there are a crap load of 3 owners and I am sure S and X owners who were expected to learn about the car via videos.

I have been advocating to let owners, specifically owners clubs hold monthly "New Owner Orientation" classes at service centers. This way we as those who live with these cars can pass along tips and tricks to ownership. This IMHO would greatly reduce the number of calls and appointments the service center and customer support lines are having to deal with.

Aerodyne | 18. Januar 2019

Great! How do I sign up to help?

Somehow, I think service hell is just starting...

TabascoGuy | 18. Januar 2019

@Shock - Very nice of you so show up and highlight the 7% cuts while ignoring the 30% growth. Still sounds like a 23% growth in the workforce to me.

JustSaying | 18. Januar 2019

I scheduled a tire rotation at the Costs Mesa. Service center using the Tesla app. Just got a text informing me that a mobile tech would be by Tuesday to do it in my driveway.

carlk | 18. Januar 2019

Now that the production hell is over it's all about production efficiency and cost cutting. I'd actually be worried if Tesla continue to keep the large head count that was needed when it was rampping up the Model 3 production. If you read that news release carefully it's all about model 3 production costs and not about service. That's a great move and good indication of how Tesla is doing in manufacturing. Not to mention Q4 is still profitable. The stock market just overreacted. (Hint: you know what to do.)

And thanks to (the one time troll Shock masqueraded as perspective buyer) Shock for coming back to bring us the good news. Save me from starting a new thread.

rxlawdude | 18. Januar 2019

10% hit on TSLA today; I think that Elon, who is usually skittles and beer, was pretty dire in the letter.

And I am not confident that this will do anything to improve service, and a bad reputation in that area will take a LONG time to leave people's minds.

carlk | 18. Januar 2019

I don't see it as dire. Elon sounded serious because he's always serious regardless of current businiss condition. He also needed to justify the head count reduction. Andy Grove, one of the best, if not the best, business managers, famously said only the paranoid survive. We all know Elon is a visionary but few actually see it that he is also a shrewed businessman. You wouldn't think vision alone allows one to start several successful multi-million/billion dollar companies in very different markets.

Shock | 18. Januar 2019


"highlight the 7% cuts while ignoring the 30% growth. Still sounds like a 23% growth in the workforce to me."

That's not how math works.

carlk | 18. Januar 2019

Why you're still here? What car you have bought now?

efuseakay | 18. Januar 2019

They’ve been hiring any bozo to work at the service/delivery centers. Many of them have no clue whatsoever about the cars/company mission etc. Now there’s a price to pay.

Tesla-David | 18. Januar 2019

I agree with @carlk the cuts are necessary and I remain confident that Tesla will be fine especially after surviving the M3 ramp last year.

I am getting a little tired of the continued references to poor service, which has NOT been my experience as a 6+ year owner (3 cars so far). We had three mobile service visits last year, and I will be taking our MS in for service today to repair non-operational AP1. I have never experienced anything but top notch, professional service at Seattle SC in past 6 years. I am confident that Tesla will work to improve service at SC's that may need improvent.

carlk | 18. Januar 2019

My experiences with Tesla services (Fremont and Sunnyvale) have always been good. Never once they did not do what they are supposed to do. Some may have the expectation of being treated like a royal but you pay the royal price for being treated like a royal. My Porsche service has always treated me (and many other) very nice. Once they even let me to jump the line to replace the brake light for free (after looked at the computer of my past record). They know I go there for few hundreds to a few thousands a pop many times over the years, some of those I'm pretty sure were not entirely necessary. At Tesla everyone is honest and very business-like. That's all I am asking for.

rxlawdude | 18. Januar 2019

I've figured out efuseakay: "They’ve been hiring any bozo to work at the service/delivery centers. "

Clearly, this clown was hired and fired. He's got a hard on now to dis Tesla at every post.

Congrats FU. You've earned a spot on my twit filter.

rxlawdude | 18. Januar 2019

@Tesla-David and @carlk,

Come down to SoCal (OC) and let me know how service treats you here.

If you can't accept the fact that Tesla's service is demonstrably worse than it was two years ago, you probably haven't been paying attention. And you know I'm a fanboi (not rabid, though).

TabascoGuy | 18. Januar 2019

@rxlawdude, Scraping the barnacles is always a good thing, unless you're a barnacle.

rxlawdude | 18. Januar 2019

@TG, we don't know exactly where those cuts were made. But we also have no evidence that they've beefed up service center staff.

In fact, here in OC, in the middle of 2018, as things were still tolerable, my SA who's always been up front said that the new Mission Viejo SvC would take the pressure off of Costa Mesa.

Well, Mission Viejo never happened. They are so backed up that an appointment for me M3 isn't till early March. Surrounding SvC earliest appointments (Buena Park, Pomona) weren't appreciably different.

The funny thing is, this doesn't seem to be related to Model 3s. The SvC reports they are handling relatively few M3s, but a lot of S/Xs.

JustSaying | 18. Januar 2019

We took my son's VW in for a $85 oil change, just got the expected call the car needs additional work $2,100 plus tax.I Trust this guy been using him for many years, they are mechanics not parts changers.
Just the cost of owning an auto with an ICE with its hundreds of articulated parts spinning at thousands of RPM.

Mike83 | 18. Januar 2019

Is that all? Only about 3500 after hiring 20,000 people and some where contractors. Shorts are having fun with this.

Tesla-David | 18. Januar 2019

@rxlawdude, I hear you and was not saying service was great everywhere, just relating my very positive experience here in Seattle. The Seattle SC is extremely busy, as I am there now. I sincerely hope your situation regarding SC performance improves soon.

carlk | 18. Januar 2019

Dealer's business model is using service as the main profit center. Not saying they are all dishonest but they will always try to make most out of your business. That is just the way people do things. When going to the Tesla service you will never worry about being "over-serviced" or "overcharged". The down side is they don't have to do everything to please you so you will continue to have work done there. Tesla could make the service center a profit generator too. That will give them the incentive to put more resources into it and be more "enthusiastic" of having you to go there. I'm not sure this is what we want though. My guess is people will hate that even more.

rx State you opinion but not to use words like fanbies or rabid fanbois will make it much more credible.

jacklondon413 | 18. Januar 2019

It's an excellent move, they ramped up staff during production hell, they needed to ramp back down. It's how you run a business. They have production running smoothly and the delivery rush was just nuts. Now is the time to streamline and reinforce efficiency.

The shorts definitely jumped all over this story could easily be twisted to a "sky is falling" story on Tesla. It was the perfect hurricane with the GM Cadillac announcements. But that's all GM did, was announce something but they don't actually have anything. And Tesla just going about their smart business moves.

I'm not worried, if you have the powder, buy up some $ TSLA.

hcwhy | 18. Januar 2019

I have a friend who bought an X a few months ago and was stunned by her lack of basic knowledge as to how the car functions. She didn't even know that speed has a direct influence on range. Whether she's calling Tesla with questions regularly or not I'm not sure, but it wouldn't surprise me if she is.

hcwhy | 18. Januar 2019

Oh...and as a side note....the service I get in Cincinnati continues to be impeccable whenever I've needed it, but I'm not there often and the car remains garaged for long periods..... so far without major consequences.

TabascoGuy | 19. Januar 2019

@rxlawdude, Has the Mission Viejo SC just been delayed or put on hold indefinitely? Either way that's not going to help your SC short term. Just like we don't know where the lay-offs were, we don't know how their SC needs are prioritized. I'm confident they made the cuts where it made sense to and will add staff where they are shorthanded when it's possible.

TabascoGuy | 19. Januar 2019

@Shock "That's not how math works."

What, did I forget to carry a one three places after the decimal point?

The math wasn't my point but nice try.

carlk | 19. Januar 2019

TabascoGuy From the news release all it has said was Tesla is trying to bring the Model 3 production cost down. I'd think the layoff is concentrated in, if not limited to, the plant. Another news yesterday was Tesla is raising the supercharging cost. This is actually a good news imo. If superchargers can be self supporting then there is no reason for Tesla not to bulid as many of them as necessary. This is the reason I have always been supportive to end of free charging even before Tesla started to do so.

That same goes for the service. It's nice that Tesla does not want to make profit from service but judging from people's reaction it may not be the best business model. When Tesla could sell as many cars it could produce there is no incentive for it to "waste" money to expand service. Tesla is still a business and a struggling business at that. The question is will we all be happy if Tesla goes the BMW/Mercedes or anybody's service model (check those forums if you don't know what they are). I think some may like it but most still would not.

SO | 19. Januar 2019

@Shock | January 18, 2019

"highlight the 7% cuts while ignoring the 30% growth. Still sounds like a 23% growth in the workforce to me."

That's not how math works.“

True. But to quibble over 2% is not the point he is making.

SO | 19. Januar 2019

Another prime case of overreaction.

Another good buying opportunity.

Sleepydoc1 | 19. Januar 2019

Every month there seems to be a tumble then every month back to the 340s. Past performance is no indication of future performance, but just look back the last couple months.

carlk | 20. Januar 2019

Short term market movement is dictated by traders, or to be more pricise computerized algorithm tradings. The only way to predict short term trend is to figure out what those traders, or computers, would do. There is no one any of us could. All those will average out over time and leave economy and company's business as only factors.

sp_tesla | 20. Januar 2019

carlk | January 18, 2019
"large head "

That funny!!!!!

rxlawdude | 20. Januar 2019

@Tabasco, unclear what's happening with Mission Viejo, but the impression I got was it's not happening at all. Again, accuracy of Tesla personnel as to future plans tends not to be very good.

But I seem to recall Costa Mesa handling 150-200 cars a day the day I dropped our M3 for service. That's not sustainable, especially when an appointment still results in several days of the car sitting, waiting for service to begin. Tons of MS cars parked all around the SvC in Costa Mesa, though these may be CPOs/Loaners.

Tesla needs to invest in a CRM (customer relationship management) system and some good project/logistics analysts, sooner than later.

FactDoc | 20. Januar 2019

« I'm not worried, if you have the powder, buy up some $ TSLA. »
I can’t agree more. Just transferred some extra money and I’m buying TSLA Monday morning on margin, I’m just sad I got a big position locked in bbd.b I can’t sell to buy TSLA. Real’y good opportunity

SO | 20. Januar 2019

Monday is a holiday.