Tesla has fired hundreds of its employees this week, including factory workers, managers and engineers, even as the electric carmaker continues to struggle to expand manufacturing and its product line.
The mass firing came during a crucial point for Tesla, which has pushed hard to increase the production of its vehicle five-fold and enter the broader market with its new sedan the Model 3.
The maker of electric vehicles missed its target for production for the inexpensive sedan, making just 260 during its just recently ended quarter, despite the existence of a waiting list of over 450,000 customers.
The company said the dismissals from this week were due to an annual review of the entire company, and insisted they should not be considered layoffs.
Some of the workers were given promotions as well as bonuses, and the company said it expects it will hire for most of the vacancies.
Tesla said it continues to grow and will be hiring new workers across the globe.
In several interviews, current and former employees have said there was little to no warning before the mass firing took place. Those who spoke to the media included engineers working on vehicle production and design as well as factory employees and engineers.
It is estimated by the workers that from 400 to 700 employees were fired, but Tesla would not say the number of employees who it let go, although it expects that employee turnover will be similar to attrition of last year.
A company spokesperson said that the majority of dismissals had been sales and administrative positions, and not in manufacturing.
Workers spoke to the media only if promised anonymity due to the fear of there being reprisals from Tesla. Employees indicated that the firings lowered company morale in several departments. Several of them said that the Model S, Model X and former SolarCity operations had been targeted in the firings.
CEO at Tesla Elon Musk promised that output would increase in the production of cars to over half a million in 2018. The company is expecting to deliver approximately 100,000 electric vehicles in 2017.
The CEO has told investors that the company was focused on the production of the Model 3 and is expecting to at some point build as many as 10,000 vehicles per week.
Manufacturing eventually will be highly automated, but during the early increase in production he expects high costs for overtime.