Tesla Cuts 200 Autopilot Workers as California Site Closes

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Vehicles at a Tesla dealership in Vallejo, Calif. (David Paul Morris/Bloomberg News)

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Tesla Inc. laid off hundreds of workers on its Autopilot team as the electric vehicle maker shuttered a California facility, according to people familiar with the matter.

Most of the roughly 200 people let go were hourly workers, the people said late June 28, a surprise given that Tesla previously disclosed head count reductions targeted at salaried positions. As recently as last week, CEO Elon Musk outlined a plan to boost hourly jobs.

Tesla’s shares fell 3.8% in early morning trading June 29 in New York. The stock had tumbled 34% this year through the June 28 close, compared with a 20% decline in the SP 500 Index.

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Teams at the San Mateo office were tasked with evaluating customer vehicle data related to the Autopilot driver-assistance features and performing so-called data labeling. Many of the staff were data annotation specialists, all of which are hourly positions, said one of the people, who asked not to be identified discussing private information.

Prior to the cuts, the office had about 350 employees, some of whom were already transferred to a nearby facility in recent weeks, the people said.

The latest moves mark a shift after a surge in hiring in recent years to fortify Tesla’s position as the EV market leader. The company, now based in Austin, Texas, had grown to about 100,000 employees globally as it built new factories in Austin and Berlin.

Musk caught workers by surprise earlier this month when he said layoffs would be necessary in an increasingly shaky economic environment. He clarified in a subsequent interview with Bloomberg that about 10% of salaried employees would lose their jobs over the next three months, though the overall headcount could be higher in a year.

Like many competitors, Tesla is grappling with strained supply chains and the other challenges that come with ramping up production in a growing EV market. Musk said recently that the company’s new plants are losing billions of dollars.

The automaker’s downsizing efforts have focused on areas that grew too quickly. Some human resources workers and software engineers are among those who have been laid off, and in some cases, the cuts have hit employees who had worked at the company for just a few weeks.

Those affected by the latest move worked on one of the higher-profile features in Tesla vehicles. In job postings, Tesla has said that labeled data is the “critical ingredient for training powerful Deep Neural Networks, which help drive the Tesla vehicles autonomously.” Staffers in Buffalo, N.Y., and San Mateo spent hours labeling images for cars and the environment they navigate, such as street signs and traffic lanes.

In Buffalo, Tesla has continued to expand its Autopilot data-labeling teams, a person familiar with the matter said. But staff at that location, who are doing the same role, are paid a lower hourly rate than in San Mateo, the person said.

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