Why Elon Musk’s Recent Email Raises Concerns About The Future of Tesla

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Not too long ago (January 2017, to be precise), France passed a law which banned companies with more than 50 employees from sending them emails after working hours. This attempt to restore work-life balance gave the French workers the much-needed right to disconnect after leaving their designated places of work. Many European countries already have laws in place which absolve their workers from the need to check and respond to their employers’ emails and other electronic communications during their non-working hours, to help them cope with the 24X7 strain of ‘digital age.’

Elon Musk, the SpaceX and Tesla CEO, who recently tweeted that he works for more than 40 hours every week, however, expects his employees to adhere to his superhuman standards!

Why otherwise would he send an email to employees at 1:20 AM (California time)? And that too, to announce a 7% cut down in full-time staff at Tesla?

A message which started with underlying the company’s achievements in 2018 shook the readers out of deep slumber as their boss argued about the need for job-cuts ‘necessary’ to help the company face its unique challenges!

This is the second time Tesla has scaled down its workforce during the last six months, having already laid off 9% staff in June 2018. The latest announcement comes as the company is, apparently, under immense pressure to deliver an affordable Model 3s soon.

“We, unfortunately, have no choice but to reduce full-time employee headcount by approximately 7% (we grew by 30% last year, which is more than we can support),” read the email.

For many 7% as a figure may not look so grave but when translated it end up in killing nearly 3,150 jobs.

“Tesla will need to make these cuts …… There isn’t any other way,” Musk added.

The Much-Awaited Tesla 3S

At present, the cheapest Tesla Model 3 costs $44,000 and runs 264 miles on a charge.

In 2015, Musk had announced a sleek ‘midrange’ battery run Tesla Model 3 costing $35,000, keeping in mind the various federal and tax rebates. The proposed sedan, however, would come with a smaller battery which would allow it to run only 260 miles on a single charge.

However, the sticker price of Tesla 3 continued to be in the $45,000 range, but Tesla insisted that it would cost the end users much lesser because they would eventually save on buying fuel. Prospective buyers who were led into believing that the ‘true cost of ownership” would be $27,500 after tax incentives even deposited $1,000 advance with the company. And that was, hold your breath, three years back!

The date was later extended to March 2018. Three years into waiting already, the promised Tesla Model 3 at $35,000 is nowhere in sight, and the internet is full of debates about the $35,000 Tesla Model 3 car.

On his part, Musk insists that the proposed job cuts are necessary to enable the company to face the unique challenges it faces in making their cars competitive with the existing models which run on fossil fuels but does not shy back from admitting that their products are still too expensive.

Automobile manufacturers all over the globe are going through a rough patch at the moment, what with even giants like General Motors, Nissan and Jaguar Land Rover laying off their workforce. The entry of luxury brands like BMW, Porsche, Mercedes-Benz and Audi might make things even tougher for Tesla which is already grappling with production and delivery issues.

Anyways, coming back to Mus’s latest email, he wraps it up eloquently that his employees must work harder than other manufacturers’ to support the “mission of accelerating the advent of sustainable transport and energy, which is important for all life on Earth.

While we all admire and appreciate Musk’s concern for a more sustainable source of energy and a more livable planet, there is no doubting that he seems to have little or no concern for his workers. An organization which can shake its employees out of sleep and shunt them out at the most unearthly hours in a most abrupt manner cannot (and should not) expect a dedicated workforce.

No wonder then that Tesla shares have nosedived on Friday and are down 13% to $302! TThe company have about $1.5 billion in debt due in 2019 — one tranche due in March and another in September.


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