Tesla Inc. reportedly closed its San Mateo, California office to expedite cost-cutting and has let go nearly 200 workers who functioned on its autopilot driver-assistant system. Most of these employees were compensated on an hourly basis.

Earlier this month, Tesla CEO Elon Musk had stated that he had a negative impression of the economic climate and hinted at reducing its workforce by 10% as a direct consequence of the temporary lockdown initiated by a resurgence in COVID-19 cases in Shanghai.

He subsequently modified his assertion and revealed that the cutbacks would only pertain to salaried employees. He explicitly noted that the number of hourly personnel would be expected to elevate in the coming times.

According to seasoned experts, the firm's substantial cost-cutting phase is a clear indication that the second quarter of this year was not easy for them given the skyrocketing raw material costs and supply chain challenges.

One of the employees who was asked to leave stated that the decision came as a complete surprise to them, as Tesla had previously informed them that they would be relocated to the Palo Alto office in stages after the lease on its California office expired.

Some even predicted that the tech behemoth would consider moving them to lower-wage jobs in Buffalo, New York, to save finances.

It is worth noting that a sizable number of staff at Tesla's San Mateo office used to work on data annotation, where they were obliged to evaluate and label the visuals accumulated from the company to be able to educate the cars’ autopilot system to withstand specific types of road scenarios.

With Musk previously referring to the new factories in Berlin and Texas as "giant money furnaces," it is likely that they could very well experience a similar situation in the future.

Source credits –

https://money.usnews.com/investing/news/articles/2022-06-29/tesla-closes-an-office-as-layoff-hits-autopilot-jobs-including-hourly-ones