By Ricardo Lezama 
The labor market is starting to feel some weakness in manufacting and information technology. Cash strapped consumers are less able to purchase mid to premium priced Teslas.
A much reported story in social media is the layoff not only of line workers, but also of the support and corporate office team in the Super Charger division. The cost heavy division was supposed to pave the way for mass consumer adoption, but with demand low, Elon Musk appears to be going all in on Artificial Intelligence: “Musk intends for the company to devote almost all of this year’s capital expenditures to artificial intelligence“. In other words, the Robotaxi dream is replacing the EV in every garage one.
Bloomberg noted that the managing director of the organization had been instrumental in getting other car makers to agree to a single standard for charging their vehicles per Tesla design specs. However, Tesla may feel content with the rest of the industry taking that rapidly diminishing demand and pivot to replacing rideshare drivers.
Tesla is going through a major reorganization. In Austin, Texas, alone, the carmaker and brand directed by Elon Musk laid off 500 people, many of whom received little warning beforehand. Some commutted to per their usual routine and found out at the site they were no longer employed.
Viral Failures
Unfortunately, Texas is not the only labor market affected.
In Northern California, production line workers, like Nick Murrillo, a graduate of San Jose State University, found themselves without a job in Mid April of this year, 2024. Murillo was a Production Manager in the Fremont Tesla facility showcased their disappointment and shock at the layoff. Murillo’s reaction video garnered over 700 thousand views as of the time of this writing.
Murrilo recounted an experience where he received an email prior to his commute, texted his manager and received confirmation that indeed he was laid off. Upon arriving to the facility, Murillo attempted to swipe into the building, but was approached by a burly security guard and informed (perhaps, confirmed) at this point that he was no longer an employee.
As a result, Murillo now has to sell his home due to change in income he has perceived as a result of the layoff. During his peak earning year, Murillo was making 120 thousand dollars at the line factory when including stocks and alternative forms of compensation. Personally, my suspicion is that a publicly traded company, like Tesla, is in a position to target longer term employees in order to cut down on inflation adjusted salary increases.
Causes
Much of the issue stems from a 9 percent drop in demand for Tesla vehicles. There is much more competition even though there is broader acceptance. Unfortunately, credit is more expensive which limits the pool of potential buyers of these electric machines. Thus, higher interest rates have in some ways, fulfilled the outcome intended; the FED’s policy is reducing the amount of free flowing capital such that cheap debt financed goods would make their way