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Tesla Shutters its San Mateo, CA Office, Lays Off Roughly 200 Autopilot Staff Without Notice

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【Summary】Tesla shuttered its Silicon Valley office in San Mateo, California this week and laid off roughly 200 employees out of 275 that were primarily working on Tesla’s Autopilot driver-assistant system. Tesla’s cost cutting moves come as the company, along with other automakers, deals with rising inflation, chip shortages and supply chain disruptions, which have resulted in production slowdowns and delayed vehicle deliveries.

FutureCar Staff    Jun 29, 2022 8:30 AM PT
Tesla Shutters its San Mateo, CA Office, Lays Off Roughly 200 Autopilot Staff Without Notice
Tesla's former headquarters in Palo Alto, California is still used as a local office after the company moved to Austin, TX.

Tesla Chief Executive Elon Musk said eariler this month that the company would need to cut around 10% of its workforce in a cost cutting move due to what Musk called a "bad feeling about the economy." Now the Tesla CEO is following through with his plans. 

Tesla shuttered its Silicon Valley office in San Mateo, California this week and laid off roughly 200 employees out of 275 that were primarily working on Tesla's Autopilot driver-assistant system, one of the people told Reuters. The person added that most of the job cuts were hourly workers rather than salaried employees.

The layoffs were first reported by Bloomberg.

This same person told Reuters that the employees at the San Mateo satellite office were previously told that they would be moving to a nearby office in Palo Alto in stages after the lease on the space expired. However, most of the workers were laid off on Tuesday instead of being transferred.

Many of the Tesla employees at the San Matero office worked on data annotation for object classification, which includes manually labeling objects in images taken from Tesla vehicle cameras. This data is used to train machine learning algorithms to improve the performance and accuracy of Tesla's Autopilot automated driving system. 

Tesla's cost cutting moves come as the company, along with other automakers, deals with chip shortages and supply chain disruptions, which have resulted in production slowdowns and delayed vehicle deliveries, which for Tesla, can impact its Q2 profitability as the second quarter comes to a close.

Last week, Musk described Tesla's new factories in Berlin and Austin, TX as "gigantic money furnaces'', burning through billions of dollars. So the company's plans to cut costs are understandable and the company remains under constant pressure to maintain its profitibility.

Earlier this month Tesla raised prices by around 5% due to inflation that's driving up the cost of raw materials. It was Tesla's third price increase since March.

The price of the Tesla Model Y SUV increased by $3,000 from $62,990 to $65,990. With the latest price bump, the Model Y now costs 25% more than it did in Jan 2021.

The price of the Model 3 Long Range jumped $2,000 from $55,990 to $57,990. However, the base rear-wheel driver version of the Model 3 remains unchanged at $46,990. 

The Dual Motor Model S sedan now costs $5,000 more, jumping from $99,990 to $104,990.

Tesla's stock price is down 43.4% since the start of the year, which erased over $400 billion in market cap.

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