Tesla Cuts 200 Autopilot Jobs In California, Other Workers Struggle For Desk And Parking Space

Tesla is shutting down its facility in San Mateo, California, and has cut an estimated 200 jobs as the electric vehicle giant works to reduce costs and get its employees back to physical work settings.

The news came as workers at Tesla’s Fremont facility were reported to have struggled with CEO Elon Musk’s back-to-office mandate.

People with knowledge of the matter who spoke on condition of anonymity to Bloomberg revealed that an estimated 200 workers under the Autopilot team of the San Mateo facility have been laid off. The layoffs are believed to have been part of the electric vehicle giant’s efforts at cost-cutting.

Tesla’s autopilot unit involves hundreds of data annotation employees responsible for labeling videos from the company’s cars. The goal was to improve Autopilot systems, which provide the driver assistance feature.

Speaking with CNBC, two employees affected by the latest layoffs said they were already aware Tesla’s lease on the facility was nearing. The affected staffers revealed that Tesla has been hiring and training some data annotation teams in Buffalo, New York. Previously, Tesla moved several employees from the Autopilot unit to its Palo Alto facility. One of the employees said many staffers thought they would be moved to another facility, but not be laid off.

CNBC obtained an audio recording of a Tuesday meeting wherein affected employees were told June 28 was their last working day. The affected staffers were told they would be paid in full for two months and they would receive emails with information on severance and benefits.

Earlier this month, Musk revealed in an email to Tesla employees that the company will cut about 10% of its salaried workforce. Musk said in the email that Tesla has “become overstaffed in many areas.” He clarified that the layoffs do “not apply to anyone actually building cars, battery packs or installing solar,” adding that the company will increase its hourly staffers' headcount.

Data annotation employees under the Autopilot unit were once deemed critical to Tesla’s goals of developing automated driving functions, Tech Crunch reported.

News of the layoffs at the San Mateo office came amid reports that Tesla employees are experiencing setbacks in their bid to adhere to Musk’s in-office mandate.

The Information reported that the Fremont, California factory has been struggling to accommodate employees returning to in-person work as there have reportedly been inadequate desks, Wi-Fi and parking spots. Employees told the outlet that remodeling in some parts of the facility as well as a surge in hiring have led to crowding at Tesla’s most productive factory.

Tesla’s piling-up issues came weeks after Musk reportedly told company executives that he had a “super bad feeling” about the economy. In emails seen by Reuters, Musk told executives that the EV company had to “pause all hiring worldwide,” adding that there was a need to lay off about 10% of salaried staffers. His email was reportedly sent just two days after he issued his back-to-office mandate.