The wave of Tesla layoffs continues, far more severe than Musk's mentioned 10%.
For instance, out of 3400 recruitment positions in North America, only 3 remain, and even these 3 positions don't seem to be full-time.
The layoffs are no longer limited to the sales department; departments such as charging, service, engineering, software, and even HR have been affected.
Executives are also leaving in large numbers, with an average of one executive departing every three days. In the past 20 days, seven to eight executives have left, and there have been several rounds of layoffs.
Everyone is hoping Musk will say, "Tesla stops here." Some employees are even afraid to check their work emails, fearing a cold layoff notice. According to Bloomberg, Musk had aimed to reduce Tesla's workforce by 20%, with layoffs potentially exceeding 20,000 people.
In China, Tesla's layoffs are equally severe.
With Zhu Xiaotong recently returning to the Shanghai factory, the sweeping layoffs continue, affecting various departments at the Shanghai Gigafactory, including customer service personnel, engineers, production line workers, and logistics teams.
In Musk's view, what's more crucial after the layoffs is advancing FSD.
Frontline workers are being laid off.
The scale of Tesla's layoffs in China seems to surpass expectations.
Musk previously stated, "Tesla is streamlining its sales and delivery system because this system has become 'complex and inefficient.'"
Insiders revealed that Tesla's layoffs in China involve multiple departments, with some facing cuts of 30%-40%, certain departments seeing layoffs as high as 50%, and others generally around 20%.
Even the Shanghai factory is not spared. According to Bloomberg, this round of layoffs also includes various departments at the Shanghai factory, such as customer service personnel, engineers, production line workers, and logistics teams. Most employees affected by this round of layoffs will receive a certain amount of severance pay plus three months' salary.
Furthermore, numerous positions have been eliminated. After the layoffs of production line workers, some employees reportedly left with their managers or departed collectively on shuttle buses.
Behind the layoffs is the comprehensive promotion of FSD. Currently, the key focus of this round of adjustments is to promote the landing of its autonomous driving technology FSD software, including its development in the Chinese market.
Even Tesla's "firefighter" Zhu Xiaotong has returned to China. Zhu Xiaotong joined Tesla in April 2014 and served in multiple operational positions before being appointed as the President of Greater China. It is worth noting that Zhu Xiaotong is one of the three top executives listed on Tesla's official website, including Tesla CEO Musk.
During her tenure as the President of Tesla China, Zhu Xiaotong spearheaded a series of initiatives for the localization of Tesla products in China, including the opening of experience centers, promoting new vehicle launches in China, and the construction of the Tesla Gigafactory in Shanghai.
At the end of April, during Elon Musk's visit to Beijing to promote Full Self-Driving (FSD) in China, Zhu Xiaotong accompanied him. As a prominent figure by Musk's side, Zhu Xiaotong's return at this time does not rule out the possibility of implementing "All in FSD" in China.
A blogger on Weibo posted that under the premise of vigorously promoting FSD, Tesla's local design team in Shanghai may be disbanded.
After the news broke, it sparked speculation among many netizens. Some expressed that "Tesla's entire lineup of updated designs should be ready, and the focus now will be on cost reduction and Full Self-Driving (FSD)."
According to Tesla's official explanation, the localization design team is established to emphasize Tesla's commitment to the Chinese market. There will be a dedicated design team stationed in China to better understand and integrate the unique needs and preferences of Chinese consumers, tailoring product differentiation based on regional characteristics.
FSD still faces many challenges.
In 2021, Tesla released the FSD Beta version, but at that time, it was not a primary focus. By the first quarter of 2024, the development of passenger vehicle battleground was hindered, making FSD a new breakthrough point. Musk has clearly stated his intention to vigorously advance autonomous driving, saying, "If Tesla cannot develop autonomous driving technology, its value is 'basically zero'."
The opportunity for development lies in Tesla's announcement of launching Robotaxi on August 8th.
FSD is the prerequisite and foundation for developing Robotaxi, as well as the core of Tesla's full automation. Tesla has set its sights on FSD and Robotaxi as its new battleground. A new battleground also signifies the need for new strategies.
Looking back at the domestic market, China, as the second-largest market after the US, is clearly on Tesla's mind. While quietly visiting China for cooperation talks, Tesla is also working to eliminate the most basic privacy and security barriers.
On the day of his arrival in China, the China Association of Automobile Manufacturers announced that the cars of six companies, including Tesla, met four data security compliance requirements, making Tesla the only foreign-compliant company.
Following this, Tesla partnered with Baidu, with Baidu providing its lane-level navigation system to Tesla. Additionally, they have reassigned their key personnel back to China to take charge, even timing the release of the Robotaxi to please the Chinese market, as "8/8 is an auspicious number in China."
However, despite Tesla's extensive preparations, entering the Chinese market is not without its challenges. There are still several hurdles to overcome.
For instance, Tesla's Robotaxi relies on Full Self-Driving (FSD), and it seems that the testing mileage has not yet met the requirements. Elon Musk previously estimated that Tesla's FSD testing mileage needs to reach 6 billion miles to meet global regulatory standards. According to data released by Tesla on April 6th, the actual testing mileage for FSD is 1 billion miles.
Moreover, both technically and in terms of liability standards, the adaptability of FSD and Robotaxi on Chinese roads is still subject to debate.
Previously, there were reports that Tesla proposed to introduce "autonomous taxi services" in China. While there may be initial support for testing and demonstration within the country, full approval for Tesla's Full Self-Driving (FSD) to be fully implemented in China is still pending.
Moreover, Tesla's large-scale autonomous driving model training is deployed in North America. Due to data security concerns, the options are either to transfer data collected in China to the U.S. or deploy significant AI computing power domestically, both of which pose significant challenges.
And the price of FSD is really quite expensive. The price of FSD in the Chinese market is 64,000 yuan, although much cheaper than in the American market.
But compared to NIO's NOP+ buyout price of 39,000 yuan and Xiaopeng's NGP buyout price of 20,000 yuan, how attractive is this price?
Some employees are feeling disheartened.
According to Musk's spoiler, the purpose of this round of layoffs is to shift towards AI and sprint towards Robotaxi. Consequently, departments unrelated to autonomous driving and AI are being hit hard with layoffs.
At the end of April, Musk laid off the entire Supercharger team at once, with over 500 employees being let go, including both regular employees and many Tesla veterans and executives.
In an email sent to Tesla executives, Musk stated that Supercharger team leader Rebecca Tinucci and new product leader Daniel He both resigned, and nearly all 500 members of the charging team left together, with only a "few" employees being reassigned to other teams.
It is evident that this round of layoffs not only involves employees but also brings significant changes among executives.
Indeed, more and more executives are leaving Tesla. Among them, Drew Baglino, Senior Vice President of Powertrain and Energy Engineering, and Rohan Patel, Vice President of Public Policy and Business Development, announced their resignations on April 15. Especially Baglino, not only Musk's core deputy but also one of Tesla's earliest employees.
On May 5th, Tesla sent out a new round of layoff emails, expanding the scope of layoffs beyond receptionists and sales staff to include software, services, engineering, and even the HR department. Musk also issued an ultimatum to executives, stating that if a higher percentage of layoffs is not carried out, they themselves will be dismissed.
According to The Information, Musk expressed in an email to Tesla executives that he intends to be "absolutely hardcore" in the layoffs.
Musk's tough approach has led to discontent among some executives, with one of them choosing to resign voluntarily.
Rich Otto, Tesla's product launch director for seven years, recently announced his resignation and posted an article on LinkedIn. He mentioned that after the recent round of layoffs, Tesla's morale has been affected, the layoffs have shaken the company and morale, and the balance has been lost. "It's hard to see long-term development. It's time for a change."
According to a statement released by Rich Otto, the main reason for his decision to leave Tesla was the company's extensive layoffs this year.
As a veteran of Tesla, he has been involved in many key events, including the 2022 Cyber Rodeo, the launch of the Cybertruck, the first deliveries of the Model S Plaid, and the first deliveries of the Cybertrucks.
Even as a long-time employee, there were complaints about Musk's major layoff decision.
However, for Musk, even if employees don't understand, he will see it through.
After all, his style has always been this way, using tough measures in times of need to steer Tesla back on track.
