Tesla CEO Elon Musk's 'Rage Firings' Could Get Him In More Trouble

Tesla CEO Elon Musk's “rage firings" could spell more trouble for him and his company. Musk previously made headlines for releasing a memo to employees at 1 a.m. to announce imminent layoffs, and now, experts are speaking out on the issue and what it could mean for him.

Musk’s “Rage Firings”

Bosses can fire their employees as quickly as they need to be let go. However, taking people out of their jobs instantly is the perfect recipe for disaster that puts many companies and business owners at risk for a lawsuit. According to Lynn Taylor, a national workplace expert and the author of “Tame Your Terrible Office Tyrant: How to Manage Childish Boss Behavior and Thrive in Your Job," the best way to let go of an employee is to keep a paper trail of their performance then let human resources handle the situation.

As Wired reported last month, citing unnamed Tesla employees, Musk fires any employee who crosses his path after getting angry over something. He was also said to be the type to intimidate his workers. Musk’s rampages, dubbed “rage firings” by a manager who spoke to Wired, appear to be very similar to what’s shown on TV shows and in movies.

The layoffs may be justified by Tesla's current situation, but Musk’s outbursts could get him into more trouble should they continue. Taylor said that one’s ability to fire a person depends on the type of organization he or she has. In the United States, employment is at will, which means employees can leave any time or companies can let them go any time. Nevertheless, one must have a valid reason when firing an employee.

Jeffrey Adelson, a partner at Adelson, Testan, Brundo, Novell & Jimenez who specializes in employment law, said that if an employee is terminated without valid grounds or evidence, the company exposes itself to lawsuits.

Millennials Still Support Tesla

On Jan. 18, Musk sent a memo to his employees explaining how the company would be laying off around 7 percent of its workforce because of the pressure on profits and to lower the cost of the Model 3. Musk went on to discuss that Tesla's cuts are necessary because of the increased production rate of Model 3.

“Higher volume and manufacturing design improvements are crucial for Tesla to achieve the economies of scale required to manufacture the standard range (220 miles), standard interior Model 3 at $35k and still be a viable company. There isn't any other way,” Musk explained.

Right after the news about the firings broke, the company's shares dived 17 percent, but this was not enough to throw off millennial investors. Markets Insider's weekly data suggests that more than 15,000 users of Robinhood, a popular investing app, added Tesla to their portfolio in the last week, making it the most-added stock over that period for the app. Currently, there are 97,404 Tesla shareholders on Robinhood.

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