Reuters analysis: Elon Musk opens the door for the emigration of Tesla’s talent
Elon Musk has to cut one in ten jobs at Tesla. Some may have already looked to the exit.
The intentions of the CEO of Tesla, transmitted in an internal email seen by Reuters, are rooted in what he described as “his super bad feeling” for the US economy.
Some of the nearly 100,000 people employed by the electric car maker may already be considering their options after Musk issued an ultimatum to return to the office this week.
In an email to staff Tuesday night, Musk threatened to fire anyone who doesn’t work 40 hours a week, in stark contrast to the flexibility offered by major technology companies competing for the same set of talent.
The office’s ruling, in addition to a sharp drop in Tesla’s share price this year – in part due to Musk’s costly pursuit of Twitter – and his public conspiracy with the Republican Party are a toxic mix for some employees.
“Tesla is starting its own local Big Resignation,” said Nicholas Bloom, a professor of economics at Stanford University, who predicts that 60 percent of employees will return to the office full-time, about 10 percent will leave and about 30 percent will seek another. work.
Tesla did not immediately respond to a request for comment.
Some technology companies, sensing the opening, rushed to invade.
Scott Farquhar, Australia’s third-richest man and co-founder of software maker Atlassian, is tweeting about plans to expand and offer flexibility. “Are Tesla employees interested?” He added.
Following the COVID-19 pandemic, more and more technicians accustomed to working from home or hybrid policies are refusing to return to the office full-time.
A former Tesla engineer told Reuters that he had recently taken a job at Alphabet due to a lack of work-life balance, including pressure to enter the office during the pandemic.
At Google, he only has to come to the office three times a week, with some members of his team working remotely, he said. He said his friends working from home “are no less productive, but much happier”.
Another former Tesla engineer said he was pressured to work in the office during the 2020 pandemic and received Covid twice – before moving to Apple.
Greater compensation for shares
The threat of layoffs and the return order come when Tesla engineers see a drop in their stock-based compensation. Tesla is facing some of the same problems that attack other companies, such as blocking China.
But investors are also worried that Musk’s $ 44 billion Twitter bid is distracting him, despite Musk’s claim that he spends relatively little time.
Shares of Tesla fell 9% on Friday after Reuters published its plan to cut staff, and Twitter announced that the acquisition of Musk has passed antitrust scrutiny in the United States. Shares have already fallen about 30 percent since Musk announced his purchase of shares in early April, roughly twice the decline of the Nasdaq index.
Graphics: Tesla vs. Nasdaq and FANG
“If this continues, they will have an absolute problem with detention. Two things are happening. You made Elon Musk say things that are contradictory and not to everyone’s liking. And you will get the share price a big hit, “said Michael Solomon, founder of the 10x Ascend compensation negotiation consultancy.
Share options are more of Tesla’s executive remuneration than its counterparts, the company said in a statement this year. When stocks do not rise, this part of the compensation may be useless.
Tesla employees receive annual bonuses in the form of shares and generally receive lower salaries than their counterparts in major technology companies, according to former and current employees and data provided to Reuters by job sites Blind and Glassdoor.
Tatiana Becker, who runs NIAH Recruiting, a start-up recruitment company, recently ran an email marketing campaign for Tesla employees and received 14% responses, compared to the normal high of 10%.
Musk brand
Of course, Musk’s impudent personality helped build the Tesla brand, allowed it to expand without marketing, and gave many employees a sense of mission related to man and his climate goals.
Long hours and unreasonable working conditions are the norm for some, said a former Tesla engineer: “That’s how we are connected.”
And other technology companies are cutting jobs or slowing or stopping employment amid declining demand, which has potentially curbed some Tesla employees’ desire to jump off the ship.
But Musk’s recent embrace of a new party political identity is repulsive to some officials, especially liberal technology workers in Silicon Valley.
“He is a very polarizing man. You either love it or you hate it, “said Will Hunsinger, CEO of Riviera Partners.
“Some people are big fans and will do anything to work for one of his companies. And others will say that I don’t really agree with his way of running the company. “
The billionaire used his numerous Twitter followers to attack Democrat lawmakers, used his proposal for a microblogging platform to protect freedom of speech, including a promise to restore former President Donald Trump’s account, and he said he would vote for Republican.
“There are people who find this very disgusting,” said recruiter Solomon. “These are people who have a lot of choice about their job opportunities.”
Many Tesla employees will wait for the shares to recover, said a former Tesla manager, who described the share awards as “golden handcuffs” that do not allow staff to leave.
“But if they think Tesla’s stock price will remain low, then they are more likely to leave: their big bonus is no longer that big.”
(Except for the title, this story was not edited by NDTV staff and was published by a syndicated channel.)
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