Musk suddenly announced: postpone his visit to India!Tesla was laid off Chinese employees: someone did not get "N+3" compensation, and it may be arbitrated!
According to a report by the Financial Associated Press on April 20, Musk said on social media on April 19 local time: "Unfortunately, due to Tesla's very heavy workload, the visit to India had to be postponed, but I am very much looking forward to visiting India later this year."
Previously, it was reported by the media that Musk was scheduled to visit India for a two-day visit on April 21 and 22 local time to meet with Indian Prime Minister Modi and announce Tesla's investment plan in India.
Image source: Modi's social media accounts
Recently, Tesla CEO Elon Musk tweeted that he is not optimistic about the economic situation, Tesla needs to lay off about 10% of its workforce, and will suspend global hiring.
Based on Tesla's current global workforce of 145,000, the total number of layoffs is 14,500, which is expected to be Tesla's largest layoff since 2017.
It is reported that the scope of Tesla's layoffs is not limited to North America, but also in Europe and Asia. Among them, in the Chinese market, the scope of layoffs involves multiple departments, some departments have completed layoffs, and sales staff are the "hardest hit areas". Musk said in the email that Tesla's "rapid growth" has led to "duplication of roles and job functions in certain areas." "To prepare for the next phase of growth, it is extremely important to look at all aspects of the company to reduce costs and increase productivity. ”
After Musk announced the news of layoffs, Tesla's stock price continued to fall for several days. Tesla, which was once in the "trillion dollar club", is now worth less than $500 billion.
Someone didn't get N+3 compensation
"Arbitration may be an option"
According to a report by Jiupai News on April 19, on April 16, news came out in the Chinese market one after another, saying that Tesla had communicated with sales stores about layoffs, and the compensation amount was "N+3" (working years + 3 months' salary), involving almost all stores. However, not all of the laid-off employees were successfully compensated with "N+3".
On the 18th, Ms. Gu, a saleswoman at Tesla's China store who was laid off, told reporters about her experience.
Ms. Gu entered a Tesla store in Yangzhou on January 28, 2024 to work in a sales position. At two o'clock in the afternoon on April 15, all Tesla employees received a layoff email from Musk. Ms. Gu recalls that at that time, she was still calling to invite new customers and return customers to visit old customers. At around 3 p.m., Ms. Gu was called into the conference room by the store manager and informed that she would be laid off.
"The reason for the layoff was that my performance did not meet the company's regulations and was not suitable for the position, and I was told to change jobs, and my mind went blank at the time because he did not inform me of the news in advance, nor did he mention anything about the layoffs beforehand. Ms. Gu recalled that the store manager asked Ms. Gu to sign the resignation application immediately and fill in the "personal reasons" to leave, "The whole process was only 5 minutes, and after leaving the conference room, I emptied the work content of the tablet and retired from all the corporate groups." ”
At about half past ten that night, Ms. Gu received a call from the store manager asking her to re-sign the resignation application. The store manager said that the reason for leaving the company was written for personal reasons, and it would not affect his future job search in the industry, but he did not mention the issue of compensation in the whole process.
On the afternoon of April 16, Ms. Gu learned that there were a large number of layoffs in the entire Tesla company, but everyone was compensated, and the compensation amount was "N+3". Ms. Gu asked the store manager why she did not compensate herself, and was told that she had not been employed for less than 3 months. "As far as I know, colleagues who work in other cities only have 'N+3' compensation for only 10 days, and my colleagues who are in the same period as me are also compensated for less than 3 months. Ms. Gu said.
Ms. Gu said that she is still communicating with the relevant person in charge of the company's human resources, but there is no result. She said that if she has not been able to handle it properly, she may choose labor arbitration to fight for her rights and interests.
"As far as I know, most of the people who were laid off have received compensation, but there are a few similar situations like me, there are 6 employees in the store in Jiangxi who have been laid off, but there is no compensation, we plan to fight to the end, and there is no result will choose labor arbitration. Ms. Gu said.
Ms. Gu's resignation application. Source: Courtesy of the interviewee
Severance pay for layoffs is "too low"
Musk apologized
According to Bloomberg quoted by the global network, Musk admitted in an email sent to employees on April 17 local time that the severance pay to some laid off employees was "too low", Musk said in the email, "In the process of reorganizing Tesla, I noticed that some severance pay was wrongly lowered", "I apologize for this mistake." I correct it promptly. ”
According to The Paper, Tesla has developed rapidly in recent years, and even after two large-scale layoffs in 2019 and 2022, the number of employees has still increased from 48,016 in 2019 to 127855 in 2022, an increase of nearly 3 times.
From this point of view, it seems reasonable for Musk to cut some repetitive positions and properly control the growth of personnel, but judging from the reaction of the capital market, the actual situation may be more complicated.
The outside world is more concerned about whether Tesla can really achieve "cost reduction and efficiency increase" through layoffs. Tesla has maintained its leading position in the EV industry for some time, but it is also becoming less attractive in the context of a slowing EV market environment and a continuous increase in the number of competitors.
In 2021, Tesla's market share in China was 16%, but as of December 2023, this figure has dropped to around 6.7%. Even in the U.S. market, Tesla's market share fell from 62% in 2022 to 55% last year, and Tesla's dominance is declining.
In terms of the number of deliveries, Tesla also suffered a serious waterloo in the first quarter of this year, with actual deliveries from January to March only 386,000 units, a year-on-year decline of 8.5%, and far lower than the average of 449,000 units predicted by Wall Street.
At the time of Tesla's vigorous "10,000 layoffs", two executives voluntarily resigned and left the company, both of whom were listed as core management on Tesla's official website. Drew Baglino, the departing senior vice president of powertrain and energy engineering, has been with Tesla for 18 years and is considered Musk's core deputy, and he has often accompanied Musk on earnings calls and important press conferences.
Michael Schulman, chief investment officer at Running Point Capital, believes that the departure of two key executives shows that Tesla's current main growth model has encountered serious headwinds, which is a bigger negative signal for the company than the announcement of layoffs.
Tesla U.S. announced a price cut
According to Tesla's official website in the United States on April 20, the price of Tesla's Model Y was reduced to $42,990, the price of the Model Y long-range version was reduced to $47,990, and the price of the Model Y high-performance version was reduced to $51,490.
The Tesla Model S dropped to $72,990 and the Model S PLAID dropped to $87,990. The Tesla Model X price dropped to $77,990 and the Model X PLAID price dropped to $92,990.
According to Jiemian News, Tesla's price cuts are all $2,000 (about 15,000 yuan).
Tesla's stock price fell more than 40% this year
The market value of 2 trillion yuan has evaporated
With major layoffs and senior executive departures, Tesla's recent "misfortune" has dealt a heavy blow to the net worth of its CEO Elon Musk.
This week, Tesla's stock price has been falling every day, with a total weekly decline of about 14.03%, and a decline of more than 40% this year. The latest stock price is $147.05, with a total market capitalization of $467.460 billion, which has evaporated more than $300 billion (about RMB 2,172.1 billion) compared with the end of last year.
Forbes data shows that Musk's net worth will reach $219 billion in 2022, but since then, Musk's net worth has fallen by about $39.8 billion (about 288.1 billion yuan). As of press time, the Forbes real-time ranking shows that Musk's net worth is only $179.2 billion.
The key factor in Musk's "halving" of his wealth is Tesla's share price, which he holds 13% of Tesla's shares, and these shares account for the lion's share of his personal wealth.
Tesla's stock price has plummeted from a peak of $415 after the 2021 stock split, to $155, a decline of more than 62%. The plunge in the stock price caused Tesla's market capitalization to drop from its peak of $1.2 trillion to $467.4 billion. Musk's net worth has also plummeted as a result.
Musk has had a bad start to 2024. Currently, Musk is the third richest person in the world, behind Louis Vuitton Chairman Bernard Arnault (personal net worth of $214 billion) and Amazon founder Jeff Bezos (personal net worth of $193 billion).
Source: Daily Economic News is synthesized from Securities Times, Forbes Rich List, Finance Associated Press, Jiupai News, Global Network, and The Paper