Elon Musk speaks at the Automotive World News Congress at the Renaissance Center in Detroit, Michigan.
Rebecca Cook | Reuters
Tesla is closing its office in San Mateo, California, and eliminating an estimated 200 jobs there, CNBC has confirmed, as part of a broader cost-cutting effort by the electric car company.
At the San Mateo facility, hundreds of employees were tasked with tagging videos from the company̵[ads1]7;s cars to improve their driver assistance systems, marketed as autopilot. Bloomberg first reported on the office’s closure and layoffs.
Two employees affected by the layoffs told CNBC on Tuesday that they knew Tesla’s lease was nearing an end. The workers asked not to be named because they were not authorized to comment on the matter.
Tesla, which has not yet fulfilled its promise of robotic taxi technology, has previously moved a number of its Autopilot data employees to the site in Palo Alto, California. The company has also hired and trained computer annotation teams in Buffalo, New York. Some San Mateo office workers had trained the teams in Buffalo, the staff said.
The typical data commentary job at Tesla involves identifying and describing objects in short clips that were captured by cameras and sensors on Tesla vehicles. Computer markers sometimes need to identify overlapping objects, such as a wheel in front of a curb or a pedestrian obstructing the full view of a stop sign. They are rated according to how many clips they can comment on accurately over short periods of time.
Most developers of driver assistance and automated driving systems outsource at least some of the data labeling work to companies such as Amazon’s Mechanical Turk, Cloudfactory, Hive AI and the App.
An employee told CNBC that many of San Mateo’s employees had expected to be moved to Palo Alto or another office, but not to lose their jobs.
CNBC also obtained an audio recording of a meeting on Tuesday, where a leader told the Tesla Autopilot data teams about the layoffs.
“You knew our lease ended here in San Mateo,” the manager said. She told workers that the company was doing its best to try to bring the entire autopilot team that was in the San Mateo office to the new location in Palo Alto.
“Unfortunately we could not,” she said. “So that means we have a restructuring in place and your positions were affected.”
Employees at the meeting were told that they would be paid in full for the next 60 days, but June 28 would be their last day of work. They were asked to immediately leave laptops and tags on their desktops, and were informed that emails with information about severance pay and benefits would be in their inbox.
Severance pay packages are expected to include compensation based on years in the company and a further two months’ benefits, which extend the coverage until 31 October.
As CNBC previously reported, Tesla is about to cut around 10% of its staff with employees. However, it plans to add more hourly workers over time.
Tesla CEO Elon Musk said in an interview published last week that Tesla’s new factories in Texas and Berlin lost “billions of dollars”, in part due to supply chain disruptions that hampered the company’s ability to increase production at both plants.
“Both the Berlin and Austin factories are giant money furnaces right now,” Musk said in an interview recorded on May 30, with a company-sanctioned fan club called Tesla Owners Silicon Valley. “It’s going to be like a giant roaring sound that’s the sound of money on fire.”
SEE: Musk calls the latest factories ‘giant money kilns’