In two emails to his employees, both of which leaked to social media, Tesla Inc. (TSLA)’s CEO, Elon Musk, has ordered the employees to return to a 40 hours week in the office. The ultimatum states that those who do not return can “pretend to work somewhere else.” In these emails prohibiting remote work, Musk said that factory employees need to have the opportunity for in-person collaboration. The tweet also specified that this meant the main Tesla office.

Musk’s anti-remote work stance is not new and was evident even earlier when he equated staying at home with not working hard. He argued that senior employees need to be visible, and that this required being together in an office.

According to Kastle Systems, a firm that operates the security card access system in several office buildings in the U.S., office occupancy rate is 43% with many employees still working from home.

Key Takeaways

  • Tesla’s employees have been ordered to return to the office or resign.
  • CEO Elon Musk tweeted that in-person collaboration is critical for future product launches.
  • U.S. office occupancy rate is 43% according to Kastle with several companies continuing to allow remote work for the foreseeable future.
  • Musk has called for a 10% staff cut due to his concerns about a coming recession.

Effect on Twitter Still Unknown

It remains to be seen how the new policy will affect Twitter which Musk plans to acquire for $44 billion. In March, Twitter’s CEO, Parag Agrawal had indicated a flexible policy that permitted employees to opt to come into the office or work remotely “forever” if that is what it took for employees to be most productive and creative.

Shanghai Factory Restart

Tesla’s Shanghai employees have also been spending more time in the factory lately. Due to the lockdown restriction in China, Tesla employees have been in a ‘closed-loop system’ that had them working 12-hour shifts, six days a week to reboot production after the lockdown-induced pause. The closed loop allowed workers to be regularly tested for COVID-19. Though the lockdown is easing, the company plans on continuing the current arrangement until mid-June to help reach its pre-lockdown production target of 2100 vehicles a day. As of May 23, the Shanghai factory was running at 45% capacity.

Staff Cuts and Hiring Freeze

Musk has also called for a 10% reduction in Tesla’s staff and a freeze on hiring to address recessionary concerns. As per the latest SEC filing, Tesla employed 100,000 people worldwide at the end of 2021.

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