By on April 9, 2019

tesla model x, Image: Tesla Motors

The torturous wait to learn if Tesla’s job cuts would come to their doorstep ended in April for dozens of members of the automaker’s sales team. As it embarks on a cost-saving plan, Tesla has let go numerous staff members and sought to close the bulk of its storefronts after moving the company’s buying process online. Last quarter’s grim deliveries report didn’t paint a rosy picture for the company, suggesting more cost-cutting to come.

According to Bloomberg, the axe fell in three U.S. cities last week.

The cuts came in Chicago, Brooklyn, and Tampa on Thursday, anonymous sources claim, with the pink-slipped staff made up of “inside sales” teams whose job was to reach out to potential customers and stimulate sales by offering test drives. Their role evolved after Tesla’s February sales model switcheroo, however. In the wake of the changes, these team members found themselves tasked with cleaning and delivering vehicles, as well as fielding inbound calls.

A now former employee told Bloomberg that the Tampa team (20 sales advisors, 2 managers) was terminated via conference call, effective immediately. A Brooklyn-based former employee recounted the same story.

While Tesla’s operations at these three locations will not cease, they won’t be as populous as before. The automaker still has customer service reps on the payroll. The sources claimed that inside sales teams remain in Tesla’s home base of Fremont, California, and Las Vegas.

Earlier this year, on the heels of a second consecutive profitable quarter (a first for the company), CEO Elon Musk stated his confidence in profitability going forward, with only the first quarter of 2019 in doubt. Almost immediately, the automaker began cutting its workforce while embarking on a campaign of seemingly endless price alterations. Many storefronts resisted closure due to lease terms.

Last month, Musk changed his prediction for Q1 2019 to a loss — an outlook backed up by last quarter’s reduced production numbers and a delivery drop of 31 percent compared to the previous quarter. Deliveries of pricey Model S and X vehicles sank to the lowest point in years.

[Image: Tesla]

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20 Comments on “Musk Picks Up the Axe Again, Cuts Sales Staff in Major U.S. Markets...”


  • avatar
    conundrum

    Tesla Epistle 1693

    Our Patron Saint and Founder is implementing some of the things he’d said he’d do which he then retracted only to reintroduce some of them. To all affected employees we suggest the bohemian life of the barista as a new career.

    The accompanying picture shows the Tesla QC Dept working at full capacity checking headlight alignment.

    Sidenote: German customers who complained about water leaks, incorrect charging cords for European usage, and dust in the paint on their new Model 3’s in March have been fired from The Tesla Appreciation Society for being silly.

    • 0 avatar
      jaffa68

      No surprise since Tesla fired their import agent in the EU because they found far too many issues during PDI. No defects have been found since Tesla took over the inspections.

  • avatar
    APaGttH

    By trickling out the cuts they don’t have to do a WARN Act filing.

  • avatar
    redapple

    The car making business aint so easy huh boy wonder>?

    Even with a ‘hot’ brand.

    Nardelli learned this lesson at FCA.

    • 0 avatar
      brn

      Given how difficult it is, he’s doing better than anyone expected.

      • 0 avatar
        ToolGuy

        Was gonna say:
        – It’s a tough business – tougher than it looks to many outsiders
        – This company has done better as a new entrant than anyone… in history??

        conundrum,
        That’s not an employee, it’s a customer. He’s petting his new loyal companion in admiration after it drove itself to where he was standing. Because the Lincoln he turned in couldn’t do that. (How do we know Lincoln? Because puffy vest = Ford; puffy jacket = Lincoln.)

        • 0 avatar
          ToddAtlasF1

          Ford Motor Company was founded in 1903. Eleven years later, they were making half the cars produced in the world. Tesla Motors was founded in 2003. Eleven years later they were still reliant on state and federal subsidies to sell a few cars. Incidentally, one of the things Ford achieved was rendering electric cars that were popular in the Victorian era obsolete.

          • 0 avatar
            ToolGuy

            Todd,

            Fair enough. Let me rephrase and ask again – Tesla has had more success as a new entrant to the US automotive market than anyone in the last 50 years?

            Bonus question: Is Ford still at 50% globally? If not why not? (They make nice trucks.)

            Extra bonus question: If Tesla sells a ‘few’ cars, I guess every “luxury” maker only sells a few – you know, since Tesla produces the top-selling “luxury” vehicle in the U.S. So the question here is, why can’t 100-year-old car companies manage to sell more than a few luxury models each year?

          • 0 avatar
            ToddAtlasF1

            I commented on how many cars they sold in 2014, eleven years after they were founded. Now that you’re trying to move the target, Honda entered the US market in 1970. The government was trying to figure out how to stop everyone from buying Accords and Civics by 1981, not paying people to buy them.

            Ford lost their market share by sticking with the Model T about a decade too long.

            Some hundred year old manufacturers have acquired enormous negative brand equity. Mercedes-Benz has 134 years in the business and does just fine selling cars far more luxurious than the Model 3.

            Are you saying the Model S is the best selling full-sized luxury sedan? They are subsidized. Tesla’s model involves forcing people to subsidize wealthy people’s car purchases. Combine that with the German niche marketing trend where they now have more models than this enthusiast cares to keep track of, and you have room for a company that makes three vehicles to have the best selling model. Let Mercedes-Benz put a gun to my head and steal my wallet every time some parasite wants an S-class, and things might change.

    • 0 avatar
      HotPotato

      I mean, Nardelli is literally the worst CEO in America…but your point stands.

  • avatar
    tylanner

    I’m not sure shareholders would want anything but what Musk has produced for them thus far.

    The hard part is done….now it’s just steering the ship.

  • avatar
    indi500fan

    OK…so they had a bunch of sales people when they had an excess of orders (which came from the internet mostly, not via sales people) and now they have more mfg capacity than orders and they get rid of salespeople.

    Musk is a blooming genius!

  • avatar
    SuperCarEnthusiast

    I try to buy a new Tesla Model S at the local storefront and it was a bad experience. Call schedule appointment and went on Friday, the next day but scheduled it the next week’s Friday. Got greeted by 4 associates neither were in sales and finally after 30 minutes a guy with only a first name, no business card and kept asking what car I am driving and I said I have several cars. Present my drivers license and insurance. Got handed to another associate. Then he try to have me test drive a Model 3, when I took all 4 associates I want to test drive the S. After waiting another 20 minutes, a different sales guy came over and talk with me a bit and then the first sales guy said that the test drive was minutes away. Finally, he move into the front seat and I enter the driver’s seat. He did bother with explain the infotainment or anything else on the S. We drive out of the Tesla parking spot on to a frontage road and then on the highway drove from one entrance ramp entry to the next off ramp and turn around and headed back the other direction. Took the exit ramp and back to the Tesla storefront. Total time 14 minutes! I ask to look over their inventory and he said the new cars are kept off site and I ask if I could go to the location to look at them. ?The reply was “No”. Ask why, “Location is secret”. So I parted ways after the internet was not working and the sale guy promise to email me some new local S models. Never receive an email from the sales guy! Been over two weeks and counting! No calls either. I called and ask for hm but the guy said he was busy and was put on hold. mAfter 5 minutes, I hung up!

    • 0 avatar
      Raevoxx

      That was rather painfully difficult to read….

      Might want to spellcheck and break that mega-paragraph up a bit :)

      • 0 avatar
        ToolGuy

        Rae,
        You’re not in sales, are you? LOL.

        SuperCarEnthusiast,
        Have you tried the online process? This might be a good time to cut the humans out of the loop.

        • 0 avatar
          SuperCarEnthusiast

          Looking online now for used Tesla Model S in as practice so i am comfortable with the Tesla routine in the hope of a new redesigned Tesla S is release, I can but the previous model S.

  • avatar
    incautious

    soon there will only be the pot smoking CEO

  • avatar
    Felix Hoenikker

    I think there is a sizable market for BEVs for sub $25k sedans and mid size CUVs if the price is under $30k. Since the cost to build a BEV excluding the battery is lower than a comparable ICE vehicle due to lower parts count and assembly time, the battery pack is the sticking point. So when is the giga factory going to start cranking out lower cost battery packs?

    • 0 avatar
      HotPotato

      The battery is the expensive part, so low cost = small battery = short range. I don’t think Tesla will ever make a short-range EV. Their whole brand identity is as the EV that doesn’t give you range anxiety. This is why they can’t profitably meet their own $35k base price target, let alone $25k.

      Ironically I suspect the most effective way to get to those price targets without subsidies in the long term, is to have much bigger subsidies in the short term. You need economies of scale to bring the price down for buyers, but you can’t get that volume without buyers in the first place. Chicken and egg. Norway shows that there is no mystery to creating demand.


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