Tesla shuts down its San Mateo office, lays off 200 employees

One of the people told Reuters that Tesla had shuttered its office in San Mateo, California and laid off about 200 employees working on its Autopilot driver-assistant system in a move seen as accelerating cost-cutting.

Most of the laid-off people had been hourly workers, a person said.

Elon Musk told top managers he had a bad feeling about the economy, and that the maker of electric cars needed to reduce staff by about 10%.

The billionaire said that only 10% of the cuts would apply to salaried workers and that hourly staff numbers were still expected to grow.

Raj Rajkumar, professor of electrical and computer engineering at Carnegie Mellon University, said Tesla is in a major cost-cutting mode. 2 Q 2022 has been a rough time for the company due to the shutdown in Shanghai, raw material costs, and supply chain problems, according to this staff reduction. Anti-pandemic measures in Shanghai have depressed Tesla's production there.

The laid-off person who spoke to reporters said that employees at the satellite office had previously been told that they would move to an office in Palo Alto in stages beginning this month after the San Mateo lease expired. Most of the workers were laid off on Tuesday.

He said it was kind of numbing. We're definitely shocked and we're blindsided. Some workers expected Tesla to shift some of the jobs to lower-wage workers in Buffalo, New York to save costs.

Many people in Tesla's San Mateo office work on data annotation - reviewing and labeling various visuals collected from Tesla vehicles to teach the cars' Autopilot system how to handle certain road scenarios.

A number of Tesla data annotation employees said on Tuesday they had been laid off.

It was a disappointing day today. Myself and almost the whole San Mateo Branch at Tesla just got laid off, Caeser Rosas, a data annotation specialist, said on a Linkedin post.

The San Mateo job cuts were first reported by Bloomberg.

Musk said that Tesla's new factories in Texas and Berlin are gigantic money furnaces losing billions of dollars.