Elon Musk says Tesla will lay off 10% of its salaried employees. Where have we heard that before? Sure, these cuts—and Musk’s “super bad feeling” about the economy, as was reported by Reuters—might be another proof point for a market downturn. But at Tesla, layoffs have also become an annual tradition of sorts.
Recall that in 2018 Musk cut 9% of salaried workers, in 2019 he cut 7% of full-time employees, and in 2020 the company instituted pandemic-related furloughs. At the same time, the company nearly doubled in size over that period to just over 70,000 people. Last year, the company hired an additional 28,000 or so people, and it’s likely added to that count this year. These cuts may have been in the cards for a while.
In fact, Musk is starting to look a lot more like former General Electric chairman and CEO Jack Welch, who famously advocated for regularly letting go of the bottom 10% of employees (Chapter 3, if you haven’t read it). Musk’s strategy appears to be similar: Hire aggressively to secure top talent, then cut underperformers.
