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Tesla slashes personnel compensation, apparently pushing them out instead of layoffs



Tesla reduces wages for employees, resulting in a significant reduction in total compensation for many retailers.

Some Tesla employees are suspicious of coming across seemingly imminent redundancies.

Earlier this week, Tesla launched the long-promised $ 35,000 version of Model 3.

CEO Elon Musk said they are planning to make this price viable by moving all sales online, closing stores and reducing retail.

But the company has not yet dismissed employees, but Electrek has now learned from Tesla employees that the car manufacturer has stopped all bonuses for retailers.

According to some Tesla employees who spoke to Electrek, these bonuses represented the majority of Total Compensation to many retailers.

It made it possible for some of the best proprietors to earn a salary in the six figures.

Now that Tesla is moving to online sales, the company removes all commissions for retailers even though they apparently continue to handle sales during the transition period.

Some employees have told Electrek that they believe that Tesla knocks out the compensation in an effort to push them out

We asked Tesla about the situation, but the company refused to comment.

In an email sent to employees and obtained by Electrek, Tesla explained CEO Elon Musk the reasoning After going to online sales:

"Last year, 78% of all Model 3 orders were placed instead of in one store, and 82% of customers bought model 3 without having a test drive. "

Note that Musk only talks about model 3, which was not in all stores, and had a limited test drive fleet throughout 201

8. He did not mention anything about model S and model X sales. This metric does not take into account customers who were first exposed to Tesla through stores, and then chose to go home and book online after having conversations with Tesla's reseller.

Instead of employees doing customer testing and handling sales, Musk says the sale should be done online and customers will be able to return the car within a week if they are not satisfied.

He wrote to employees in e-mail:

"Customers can now buy Tesla in North America via their phone in 1 minute, and that opportunity will soon be expanded worldwide. We also make it much easier to Exit and return a Tesla without a test drive You can now return a car within 7 days or 1000 miles for a full refund.The consumers are becoming increasingly comfortable buying online, especially Tesla – a testament to the products we make . "

He added:

" As a result, over the next few months we will be knocking down many of our stores and significantly reducing our sales and marketing expenses, which will help to make them The price changes we've announced today are possible. By switching all online sales, combined with other ongoing cost-effectiveness, we can reduce by around 6% on average, so we can achieve the price of $ 35,000 model 3. "[19659013] Musk explained what it wants Mean for Tesla Resellers:

"Unfortunately, this means that some jobs will be affected or transferred to other areas of business. This is a difficult decision, but it is necessary [is] to make our cars cheaper. Our sales team has fought on the front line to promote our mission and has been our connection with hundreds of thousands of customers along the way. I want to express my sincere gratitude for everything you have done.

In the coming weeks, we will evaluate all areas of our sales and marketing organization to understand where operational efficiencies are and how best to support the transition to online sales, while continuing to deliver a truly amazing and educational Tesla-buying experience. "

CEO said that more details about the transition will be released soon.

Electrek's Take

If Tesla really tries to avoid paying off by pushing employees out through the transition, it's really disappointing It is common corporate greed behavior that I would not expect from Tesla.

But at an even higher level, the timing of all this seems wrong. , and Reduce Headcounts.

Nevertheless, Elon makes it sound like they are just launching a review of their sales to evaluate "all areas of our sales and marketing organization to understand where there are operational efficiencies." [19659002] Shouldn't they have done that before changing prices? Do they really get what kind of impact it will have on the cost and also on sale?

I can get how to move all sales on The internet does not have such a big effect on model 3, but what about model S and model X? Why didn't he include the statistics for these cars? Stores all had a decent screen and test drive model S and model X fleet through 2018. I think there would have been more valuable information for the time period.

In particular, consider that these products are more mature, and Model 3 remains in the "New Product Voltage" category where the former adopters, who would be more likely to order online without a test drive, still make up a large percentage of buyers.

Let's do a quick informal survey.

If you are an Electrek reader who bought a model S, model X or model 3 over the past year, you bought your car online or through a store:

Have you tried before ordering Tesla? 19659033] Take our poll

Don't make me wrong, no one is happier than me, that Tesla finally managed to deliver $ 35,000 model 3. I just wanted them to have delivered it through production and cost efficiency. We discussed this in more detail in our latest podcast episode.

One thing is for sure, this whole transition seemed rushed.

What do you think? Please let us know in the comment section below.


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