In June, Tesla CEO Elon Musk sent an email to the automaker’s executives, informing them that due to overstaffing, Tesla will be reducing salaried headcount by 10%, and that worldwide hiring should be paused.
Though the email was debated and Musk did not openly admit it, the decision to lay off some employees is materializing.
Now, TechCrunch reports below that Tesla is laying off 229 data annotation employees who are part of the company’s larger Autopilot team and is shuttering the San Mateo, California office where they worked, according to a California regulatory filing.
Tekedia Mini-MBA edition 16 (Feb 10 – May 3, 2025) opens registrations; register today for early bird discounts.
Tekedia AI in Business Masterclass opens registrations here.
Join Tekedia Capital Syndicate and invest in Africa’s finest startups here.
TechCrunch previously reported that nearly 200 employees were being laid off, according to sources who talked to TechCrunch on condition of anonymity. Bloomberg was the first to report the layoffs, which have now been confirmed via a Worker Adjustment and Retraining Notification Act notice. The WARN ACT requires employers conducting mass layoffs to issue a 60-day notice for affected workers.
The San Mateo office employed 276 workers. The remaining 47 employees may be sent to work in Tesla’s Buffalo Autopilot office, according to sources familiar with the matter. Most of the workers were in moderately low-skilled, low-wage jobs, such as Autopilot data labeling, which involves determining if Tesla’s algorithm identified an object well or poorly, according to one source.
The source noted layoffs of this team were rumored to be on the table for months, and that the work would be offloaded to Buffalo.
The layoffs are part of the 10% reduction in workforce that Tesla CEO Elon Musk announced last month.
The failure to issue a WARN notification has already led to at least one lawsuit. Lawyers representing two former Tesla employees who were terminated in mid-June filed in June a lawsuit in the U.S. District Court for the Western District of Texas that alleges the company did not provide the 60 days of advance notice required by federal law during a recent round of layoffs.
Last week, the plaintiffs’ lawyers filed an emergency motion asking a judge to prohibit the electric vehicle maker from forcing workers to sign releases in exchange for less severance than federal law provides.
