On Tuesday, Tesla CEO Elon Musk sent an email to staff announcing that the company would fire about 9% of employees, with the first round of layoffs beginning this week.
In the email, Musk wrote, “Tesla has grown and evolved rapidly over the past several years, which has resulted in some duplication of roles and some job functions that, while they made sense in the past, are difficult to justify today.” Musk also cited the need to reduce costs and become profitable.
The cuts will “almost entirely” affect salaried employees, and not production associates, the email said. As for those employees being laid off, Musk wrote, “Tesla is providing significant salary and stock vesting (proportionate to length of service).”
Towards the end of the email, Musk wrote, “we are making this hard decision now so that we never have to do this again.”
Musk rightly addressed both the victims and the survivors of the layoffs
There’s no one, universally approved way to conduct mass layoffs — and certainly not one way that will avoid hurting people, financially and emotionally.
But career experts have cited certain guidelines for firing people, and Musk seems to have followed the most important.
As Ben Horowitz, a cofounder and general partner of the venture-capital firm Andreessen Horowitz, wrote in a 2010 blog post, it’s important for the CEO to address the entire company before going through with he layoffs — which Musk did.
Horowitz cited advice from Intuit founder Bill Campbell: “The message is for the people who are staying. The people who stay will care deeply about how you treat their colleagues.”
Andy Molinsky, a professor at Brandeis University’s International Business School, told Business Insider that when layoffs occur, the “survivors” will necessarily be thinking, “Could this have been me?” That’s why it’s important to show the people being laid off dignity and respect — in addition to offering them severance pay.
Molinsky added that the reasons for the layoffs should feel legitimate and justifiable. Otherwise, he said, that may color the perception the people left behind have of the organization. It might even affect their level of commitment.
Musk appeared to check this box as well: He outlined several key reasons why Tesla was conducting layoffs, including but not limited to the need to be profitable.
Perhaps most importantly, Musk didn’t displace the blame for the layoffs.
As Guy Kawasaki, chief evangelist of Canva and former chief evangelist of Apple, wrote in a 2006 blog post, “Ultimately, it is the CEO’s decision to make the cuts, so don’t blame it on the board of directors, market conditions, competition, or whatever else.”