Tesla CEO Elon Musk Lays the Cross-hairs on Contractors

To slash costs amidst record quarter revenue loss, Tesla is laying the hammer on third-party contractors and sub-contractors.

The troubles that Tesla is having is no secret to anyone. From autopilot issues resulting in fatalities to delayed production on the Model 3 and the Tesla Semi, the company is seeing faith from investors shrink. Now, CEO Elon Musk is calling out all contractors and subcontractors to be fired unless employees are willing to defend them.

In a memo sent by Tesla CEO Elon Musk to employees this week, obtained by Electrek, he lays out the conditions:

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"Please note my comment below about contractor companies and consultants," reads a portion of the memo. "I extended the performance evaluation deadline to provide more opportunity to demonstrate excellence, but now time is up. Please send a note to HR before Monday justifying the excellence, necessity, and trustworthiness by individual (not just the contractor company as a whole) of every non-Tesla person who has badge access to our buildings or network access to our systems."

No word on the percentage of positions that are at risk or have been eliminated.

The Urge to Purge

Earlier in the week, Musk also announced plans to purge the company in an earnings call with analysts, mentioning "we've got barnacles on barnacles. So there's going to be a lot of barnacle removal." In short, Tesla's hires a disproportionate number of contractors at its factories via agencies, with roughly 38,000 employees worldwide.

This report also comes amidst a new internal goal of 6,000 vehicles per week by the end of June, with the news delivered in an April email that also called for improved performance amongst contractors, better internal communications, and policy changes such as expenditures over $1 million requiring approval.

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