Following Elon Musk's announcement to reduce their salaried workforce by 10%, nearly 460 employees have left the company, according to Punk and Pinstripes. Newer EV manufacturers are swopping up these employees, and now we have an interesting shift in the market as these new manufacturers take market share.
According to the same Punk and Pinstripes report, Rivian has hired 56 former Tesla employees, Lucid has swiped 36, and other top companies like Apple and Amazon have snatched up 51. More than 180 of the laid off employees have joined a new company that has some competition with their former employer in just the past 90 days.
Don't think only all electric manufacturers are taking up all the former Tesla employees. Both General Motors and Ford have hired 8 former Tesla employees, no doubtily to help with the expansion of their all-electric fleet. Zoox, an Amazon-backed self-driving company, and Redwood Materials, a battery recycling compnay, have also employed their own number of the highly sought after pool of ex-Tesla employees.
All these lay offs and pick ups, that has become similar to the free agency market of a sports league, begs the question who got better and who got worse? This article will examine what the lay offs and pick ups mean for Tesla and its competitors.
Why Elon Musk Laid Off Employees
The decision to lay off over 460 employees stemmed from a couple of issues, mainly, the US economy and overstaffing. According to Elon Musk, via an email sent to executives in June, Tesla is overstaffed in many ways, and 10% of its workforce is needless. With more than 100,000 employees, this means that Tesla will dismiss about 3,000 salaried empoloyees from its workforce. Even though Musk said Tesla would increase the number of hourly employees, he has actually fired a hundred or so of hourly employees in the last couple months.
Because of the economic market, Elon has put on a hiring freeze for Tesla. He attributes the freeze to the prediction of a US economic recession he says we will have for the next 18 months. Since the announcement, Tesla's stock has dropped more than 8%. As a matter of fact, the Berlin and Shanghai factories have temporarily paused production due to the distressing Q2 earning reports.
How Rival EV Manufacturers Benefit From Tesla's Lay Offs
Since hiring ex-Tesla employees, Lucid and Rivian have seen a significant boost in growth and production. Lucid has recieved approval for a new facility in Arizona. Rivian;s stock price, after taking a nose dive shortly after its IPO, has started to rebound slightly as it has rose over 24% in the last week. Apple is going to use their new 51 employees to help spark Project Titan, Apple&spos;s project for a full self-driving car.
The next couple months, with even more Tesla lay offs coming, other all electric car manufacturers will contiunue to expand their teams and challenge Tesla even more.