Elon Musk’s Firing Spree Hits Tesla’s HR Department Ahead of Model Y Debut

Last month, Tesla lowered the starting price for Model 3 to $35,000, a price point long-promised by Elon Musk.

Last month, Tesla lowered the starting price for Model 3 to $35,000, a price point long-promised by Elon Musk. VIVEK PRAKASH/AFP/Getty Images

Tomorrow, Tesla will unveil the long-awaited Model Y SUV. But about 150 Tesla employees won’t be able to see the launch proudly wearing their staff badges.

On Tuesday, Tesla laid off roughly a third of its global recruiting team, or about 150 people, Electrek first reported, citing people familiar with the matter.

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Affected employees were given notice on Tuesday morning along with severance packages based on how long they had stayed with the company. Some were told that the layoff was not performance-based, but for broader cost reduction reasons.

The cutback was part of a seven percent company-wide downsizing Elon Musk announced in January, which he reasoned as a small adjustment to Tesla’s recent rapid growth. Last year, Tesla’s total headcount increased by 30 percent, “which was more than we can support,” Musk wrote in a company blog post.

Specifically, the shakeup in the recruiting department could be due to the Tesla’s reduced projection for future retail hiring.

Two weeks ago, Musk said Tesla would start closing some of its 378 stores and service centers globally and move sales to online channels in a bid to reduce costs. Meanwhile, the company also lowered the starting price for Model 3 cars from $43,000 to $35,000, a price point Musk had long promised his fans.

Similar to the Model 3, the upcoming compact SUV Model Y will also be an affordable model targeting mass consumers, priced at around $38,500. Expectation on the new model is high as SUVs are currently the fastest-growing vehicle segment in the U.S. and China, Tesla’s two largest markets.

Tesla declined to comment on Tuesday’s layoff.

Elon Musk’s Firing Spree Hits Tesla’s HR Department Ahead of Model Y Debut