Brain drain

MiguelAznar

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This concerns me more than high prices for chips and raw materials like lithium and nickel: potential brain drain from Tesla.

https://www.reuters.com/markets/europe/elon-musk-opens-door-tesla-talent-exodus-2022-06-03/
SAN FRANCISCO (Reuters) - Elon Musk needs to cut one in ten jobs at Tesla. Some may already have their eye on the exit.

The Tesla chief executive’s intentions, conveyed in an internal email seen by Reuters, are rooted in what he described as his “super bad feeling” about the U.S. economy.

Some of the nearly 100,000 people employed at the electric carmaker may already be considering their options after Musk issued them with a return-to-office ultimatum this week.

In an email sent to staff Tuesday night, Musk threatened to fire anyone who did not work in the office 40 hours a week, a sharp contrast to flexibility offered by Big Tech companies that compete for the same talent pool.
The office edict, on top of a steep drop in Tesla’s share price this year – partly due to Musk’s costly pursuit of Twitter – and his public alignment with the Republican party are a toxic mix for some staff.

“Tesla is kick-starting its own local Great Resignation,” said Stanford University economics professor Nicholas Bloom, who predicted that 60% of employees would return to the office full time, about 10% would quit, and about 30% would look for another job.

Tesla did not immediately reply to a request for comment.

Some tech companies, sensing an opening, were quick to swoop.

Scott Farquhar, Australia’s third-richest man and the co-founder of software maker Atlassian, tweeted about plans to expand and offer flexibility. “Any Tesla employees interested?” he added.

In the wake of the COVID-19 pandemic, more and more tech workers, used to working from home or hybrid policies, are refusing to come back to the office full-time.

One former Tesla engineer told Reuters he recently took a job at Alphabet because of the lack of work-life balance, including pressure to come into the office during the pandemic. At Google, he has to come to office only three times a week, with some of his team members working remotely, he said. He said his friends working from home “are not less productive, but significantly happier.” Another former Tesla engineer said he had been under pressure to work in the office during pandemic in 2020 and got Covid twice - before moving to Apple.

BIGGER STOCK COMPENSATION

The threat of layoffs and the return-to-office order come as Tesla engineers are watching their stock-based compensation drop. Tesla faces some of the same problems assailing other companies, such as China lockdowns.

But investors also are concerned that Musk’s $44-billion pursuit of Twitter is distracting him, despite Musk’s contention that he spends relatively little time on it.
Tesla stock fell 9% on Friday after Reuters published his staff cut plan and Twitter said the Musk acquisition had passed U.S. antitrust review. The stock had already been down about 30% since Musk announced his purchase of shares in early April, roughly double the drop of the Nasdaq index.

“If this is sustained, they will absolutely have a retention problem. You’ve got two things happening. You’ve got Elon Musk saying things that are controversial and don’t appeal to everybody. And you’ve got the stock price taking a big hit,” said Michael Solomon, founder of compensation negotiation advisory service 10x Ascend.

Stock options are a bigger portion of executive compensation at Tesla than at its peers, the company said in its securities filing this year. When shares don’t go up, that part of compensation can be worthless.

Tesla employees get annual bonuses in the form of stocks, and generally receive lower cash salaries than peers at big tech companies, according to former and current employees and data provided to Reuters from job sites Blind and Glassdoor.

Tatiana Becker, who runs NIAH Recruiting, a recruiting firm for startups, recently did an email marketing campaign to Tesla employees and received responses from 14%, compared with a normal top rate of 10%.

MUSK BRAND

To be sure, Musk’s brash personality has helped build the Tesla brand, allowed it to expand without marketing, and given many employees a sense of mission tied to the man and his climate goals.

Long hours and unreasonable working conditions are the norm for some, a former Tesla engineer said: “It’s how we’re wired.”

And other tech companies are cutting jobs or slowing or pausing hiring amid weakening demand, potentially reining in some Tesla staff’s willingness to jump ship.

But Musk’s recent embrace of a new partisan political identity is off-putting to some employees, particularly liberal tech workers in Silicon Valley.

“He’s a very polarizing guy. You either love the guy or you hate the guy,” said Will Hunsinger, C.E.O. at recruiting firm Riviera Partners.

“Some people are huge fans, and they’ll do anything to work for one of his companies. And others will say, like, I don’t really agree with his way of running the company.”
The billionaire has tapped his large Twitter following to attack Democratic lawmakers, used his bid for the microblogging platform to champion free speech, including a pledge to restore former president Donald Trump’s account, and he has said he will vote Republican.

“There are people for whom this is very distasteful,” recruiter Solomon said. “These are people who have a lot of choices about their employment options.”

Many Tesla employees will wait for the stock to recover, said a former Tesla manager, who described stock awards as “golden handcuffs” that keep staff from leaving. “But if they think the Tesla share price will remain low, then they are more likely to leave: their big bonus isn’t so big anymore.”
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rr6013

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No worries, Mate.
Tesla is past its heavy lifting brainiac phase. It also survived the BS&T(Blood,Sweat&Teslas) phase where it took brains to teardown and throw out what doesn’t work. Tesla emerged fully capable of spitting Teslas out fast as an OEM.
It just crowned a Gigafactory ”machine” that pumps out Teslas faster than any OEM. You see where this is headed…
Brain drain yes. But all those brains are built into every Tesla for it to be a success. Smarts, street and factory, remain in high demand to shepard the material, labor and pre-Teslas into machinery. BUT them smarts are not the textbook smarts that brains bring to invention, innovation and creativity. To solve beastly, gnarly predicaments takes truly street smarts meet factory smarts kinda wetware Brainiacs just don’t got! Respect those smarts every bit as much as Brainiacs. They will make Tesla!
How this man, EM, keeps getting the luck of the draw, I’ll never know. But just when he needed to paredown hired brains a recession showed-up on the horizon. It’s reared-up and bitten Tesla in the ass and EM feels it. He’s smart enough to recognize it, see through it and take the fate of Tesla into his own hands - rather than absorb the losses. Elon chose the lose-win strategy to take the character assassination for being the bearer of bad news.
Tesla is in good capable hands.
 

FutureBoy

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Below is a good rundown of the situation and why this is not a brain drain. This is the 3rd time Elon has done this at Tesla. No worries needed.



See you stockholders in 2032.
 
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MiguelAznar

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How does the Solving The Money Problem video show that there will be no brain drain? What it says is that the cuts will not affect anyone actually building cars, batteries, or solar. People who are not actually using their hands on a product do still use their brains. So people who are using mostly their brains (design, logistics, purchasing, coding, AI, etc) are subject to the 10% cut.

Even if the Cybertruck were completely finished and all they had to do was assemble the materials and parts that they have sitting at the factory, this does not bode well for any future improvements, particularly FSD. But it looks to me the Cybertruck is not finished. There is still much to do to get the factory up and running, and quite possibly parts sourced.

When the guy in the video repeatedly referred to the US president as Brandon, it lost objectivity and credibility. And his mocking got worse. I tolerated his childish behavior to find any important points he might be making. Was anyone else more successful than I?
 


FutureBoy

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How does the Solving The Money Problem video show that there will be no brain drain? What it says is that the cuts will not affect anyone actually building cars, batteries, or solar. People who are not actually using their hands on a product do still use their brains. So people who are using mostly their brains (design, logistics, purchasing, coding, AI, etc) are subject to the 10% cut.
His point was that the bottom 10% of salaried employees (as interpreted by Elons qualifications including those who don't show up to the office or are not fully bought into the cause) are the ones who will get let go. Not the "brains" or the people on which the company is significantly reliant. And since this is actually the 3rd round of layoffs we can look back and see that the last 2 rounds did not cause Tesla to lose ground or falter on the innovation front.
 
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MiguelAznar

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And since this is actually the 3rd round of layoffs we can look back and see that the last 2 rounds did not cause Tesla to lose ground or falter on the innovation front.
I hope you’re right, as I’m looking forward to Cybertruck as much as anyone here.

Maybe Elon figured out that none of the brains Tesla needs to keep will be lured to other tech companies that allow work from home. But some of them might be immune compromised, have family members who are, have elderly parents, or are just concerned about the extreme communicability of the new Covid strains. It strikes me as an imprecise way to separate the “best” employees.

Still, Elon has a bit more experience running companies than I, so my fingers are crossed.
 

rr6013

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I don't know who put this idea in his head, but comoanies rarely do well in the long run from hiring freezes.

Whatever bug was up his what probably just ruined his company's recruitment and may have doomed FSD and his robot.

-Crissa
After 24hrs, no EM walkback and seeing JPMorgan’s “huuricane” warning for financial system, I’ll take whatever Koolaid Elon’s drinking. Its in character for EM to shimmy before he jumps.

That “feeling” was his shimmy. The 10% his first cut.
 

Crissa

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Exactly. That's what killed Microsoft's lead in the 00s. It's really only their video games and installed base that saved them from becoming has-beens like every other PC and operating system company save Apple. (The inverse, of course, is that Apple's system competence never helped it gain share back until iOS.)

After 24hrs, no EM walkback and seeing JPMorgan’s “huuricane” warning for financial system, I’ll take whatever Koolaid Elon’s drinking. Its in character for EM to shimmy before he jumps.

That “feeling” was his shimmy. The 10% his first cut.
This isn't 2008. And cutting employees wasn't the solution then, either.

-Crissa
 

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This isn't 2008. And cutting employees wasn't the solution then, either.
Not 2008, likely worse.

Somebody has to pay back all that fake fiat currency that has been pumped in by the fed in the trillions since 2008 in this great revolving door ponzi scheme. People don't get what a trillion is. Every dollar you print halves the value of another dollar out there.

I think Tesla can cut 10% of employees just on the factory space construction side alone, and have zero impact on production or development capacity. Its also a good way to get people motivated, which I think is more important atm for ramping production, and that can offset the loss.
 


Crissa

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Not 2008, likely worse.

Somebody has to pay back all that fake fiat currency that...
Literally not how any of that works.

Record profits. Don't let the inflation bug bite you when corporations are making record profits.

That means the inflation you're seeing? That's companies taking it out of your pocket.

-Crissa
 

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Literally not how any of that works.

Record profits. Don't let the inflation bug bite you when corporations are making record profits.

That means the inflation you're seeing? That's companies taking it out of your pocket.

-Crissa
If you read and understand my post, in particular how fiat currency is created, you wouldn't need to lecture me on how it isn't. 😋
 

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This isn't 2008. And cutting employees wasn't the solution then, either.
Fourteen years from now it won’t be 2022, either. The U.S. has eight years to halve CO2 production.

AGW, Inflation, global QT and pandemic amount to a cascading catastrophe beyond 2°C. That is the price in failure to act. I applaud EM to act 1st. That’s his job. Elon is on-mission.

A world of hurt awaits. Many acts must be taken to avert 2°C overshoot. Acts far more difficult, moral acts and acts whose consequences have absolute negative outcomes attached.

That’s the point. Negative global warming over the next 8 yrs. is imperative. It’s the best of all possible outcomes. Anything else is collateral. For if it is not, absolutely everything does go negative after 2°C.
 

Crissa

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If you read and understand my post, in particular how fiat currency is created, you wouldn't need to lecture me on how it isn't. 😋
Yeah. And you don't seem to care about any other side of the balance sheet than that one.

Did every country in the world magic up cash to spend? No? But they're all experiencing inflation?

Why do you blame this one thing and not the others in the chain of things, namely the companies that raised their profits by raising prices? The prices we use to define inflation?

Fourteen years from now it won’t be 2022, either. The U.S. has eight years to halve CO2 production.

AGW, Inflation, global QT and pandemic amount to a cascading catastrophe beyond 2°C. That is the price in failure to act. I applaud EM to act 1st. That’s his job. Elon is on-mission.
Cutting employees won't increase production. It's the opposite of what you want.

-Crissa
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