Tesla Announces 601 More Employees Laid Off in Fremont, Palo Alto

According to a new Worker Adjustment and Retraining Notification (WARN) notice filed late on Monday, electric automaker Tesla is to fire another 601 at their Palo Alto development hub and Fremont factory, adding to the over 3,300 employees in the state that were laid off just last month.

While Tesla had a rapidly growing presence in California in the 2000’s and 2010’s, with the company even being headquartered Palo Alto for many years, economic and other factors forced the company to relocate their headquarters to Austin, Texas in late 2021. While the company added a battery factory in Lathrop, more offices in Southern California, and moved their engineering and AI HQ back to Palo Alto only last year, Tesla also continued pulling away from the state at the same time. In 2022, the company laid off 200 workers in San Mateo due to curbed growth during the pandemic. Tesla also had slipping sales, with the company falling far below expectation during Q1 2024. Combined with an overall cooling of the electric car market, more overall competition, and recent recalls of their vehicles, Tesla had warned that they could be letting go as much as 10% of their worldwide workforce.

Last month, Tesla made good on their promise, announcing that around 6,000 people would be laid off in the U.S. Within California, losses were at 3,332. According to the WARN filings, 2,266 of those let go in California would be at the Fremont factory, with 486 also being let go in Palo Alto. Significant numbers would also be let go in Lathrop and Burbank, with the rest being let go from individual showrooms, stores, and service centers.

“The layoffs will prepare Tesla for our next phase of growth, as we are developing some of the most revolutionary technologies in auto, energy and artificial intelligence,” said the company in an SEC filing last month.

Since then, the company has continued to fluctuate. At the end of April, Tesla fired virtually it’s entire Supercharger team, adding even more layoffs. However, during the last weekend, Tesla hired back many of the Supercharger team because of an upcoming expansion of the Supercharger network. Despite this. Tesla CEO Elon Musk approved more cuts in other areas, resulting in the WARN notice on Monday letting go another 601 employees in California.

601 more Tesla employees to be let go in Fremont, Palo Alto

Unlike the April layoffs, which affected employees across the state, the firings this month have been only centered around the Bay Area. Specifically, 223 people in Palo Alto and 378 at the Fremont factory are to be let go. Affected employees will have roughly one month to prepare, as those layoffs are set to begin on June 20th. Much like the April cuts, the layoffs in May are expected to increase efficiency and reduce overhead to help make up for slumping sales in recent quarters. CEO Elon Musk has also stated that he wants to have a total 20% cut in the company’s workforce, with last month’s firings just covering 10% of it.

As of Tuesday afternoon, neither Tesla or Musk has yet to release an official statement about the new layoffs. However, automotive analysts have said that, since California still has the bulk of Tesla employees, it is not a big surprise that the company continues to shed jobs in the Golden State.

“Despite moving out to Texas and building that big factory out there, California is still the state with the most total Tesla employees,” Los Angeles-based automotive analyst Justin O’Rourke told the Globe on Tuesday. “So it shouldn’t come as a surprise that California got the brunt of this latest round. It should be noted though that only their two largest presences in California, in Fremont and Palo Alto, were affected. I mean Fremont has [over 20,000 employees]. You’re looking at making things more efficient, a plant that size will have some redundancies.”

“This isn’t great for the state. I mean, these last two rounds, that’s thousands of employees we’re talking about. But Tesla wants to stay alive. And this is how they do it. It’s not pretty, but it sadly needs to be done.”

Tesla is expected to give an official announcement about the layoffs soon.