Tesla struggles with Elon Musk’s strict reinstatement policy

Tesla Inc CEO Elon Musk attends the World Artificial Intelligence Conference (WAIC) in Shanghai, China on August 29, 2019.

on the song | Reuters

Tesla CEO Elon Musk enacted a strict return-to-office policy this spring, abruptly informing employees by email on May 31 that they would need to “spend at least forty hours in the office per week.” He suggested that nothing else is “contact him”.

Three months after that decree, Tesla still lacks the room or resources to get all of its employees back into the office, according to people who work for the company in the US and internal documents seen by CNBC. The people declined to be named because they were not authorized to speak to the press on behalf of the company.

The back-to-office policy has also lowered morale, especially among teams that allowed employees to work remotely as needed before Covid-19.

In general, Tesla has been open to remote work among employees who held office positions before the pandemic. As the company’s workforce has expanded in recent years, the focus has been on building international hubs and a new plant in Texas. You haven’t built enough new workspaces or acquired enough office equipment at existing facilities in Nevada and California to bring in all of your office employees and long-term contractors on forty hours a week.

According to several existing people who work there, Tesla recently wanted to bring its San Francisco Bay Area employees to the office 3 days a week, but the shortage of chairs, office space, parking space and other resources proved too much. (Some of this has been previously reported by The Information.) Instead, Tesla has staggered office schedules going back two days a week.

Even simple supplies like dongles and charging cords were in short supply. On days when more employees are scheduled to work on site, crowded conditions send people to make phone calls outdoors, as Tesla has never built enough conference rooms and phone booths to accommodate so many employees present at one time.

hit morale

The company now monitors employee attendance, with Musk receiving detailed weekly reports of absenteeism.

In early September, internal records show, about one-eighth of employees were out of the house on a typical day in Fremont, California, home to Tesla’s first US auto assembly plant. Across Tesla, this number was slightly better, with about a tenth of employees absent on a normal work day.

The numbers have remained within that range since March 2022, which is before Musk’s orders, according to internal reports seen by CNBC. The rate of absenteeism goes up on weekends and on holidays, as one might expect.

Tesla’s absenteeism is measured using data from workers who have posted badges at the facilities, with unplanned absences divided by planned vacations to schedule daily totals, according to internal records and people familiar with reports sent to Musk.

Not all employees are tracked the same way. Direct Reporting to Elon Musk Swipes don’t count toward their badges for internal reporting, for example.

The back-to-office policy — vague and informal as it is — has caused a significant drop in morale among some employees, according to internal messages seen by CNBC.

Before COVID-19 restrictions, Tesla managers generally figured out how much remote working was appropriate for their teams. Musk’s hard-line policy has virtually eliminated this freedom, although some executives may still be able to strike deals for “exceptional” employees.

In early June 2022, right after Musk tasked 40 hours on site for everyone, Tesla made sharp cuts to its staff. Employees who were previously hired as remote workers but couldn’t commute to stay in the office were given 40 hours a week until September 30 to move in or take a Tesla severance package.

About a week after giving this presentation internally, Tesla HR asked people who live far away if they plan to move in and work in a Tesla office 40 hours a week. Some of those who said they weren’t sure if they could move, or who said they definitely couldn’t, were fired in June without warning, according to internal correspondence read by CNBC and two people with direct knowledge of the terminations.

This policy also drained some of Tesla’s ability to recruit and retain top talent. At least a few well-liked employees have resigned because they wanted more flexible arrangements, according to internal correspondence and two resignations confirmed by CNBC.

An employee told CNBC that some workers who lived away from the Tesla office are now living hours away from their families to meet the new requirements.

This employee said they are particularly concerned about Tesla’s migrant workers, who could lose their visas if the company suddenly decides to terminate their roles due to a changing attendance mandate.

They were also concerned about how Tesla’s closed mindset about remote working could achieve the company’s diversity goals.

We went inside the first Giga factory of Tesla

In the 2022 Diversity Report, released in July, Meta revealed that: “US candidates who accepted remote job offers were significantly more likely to be black, Hispanic, Native American, Alaskan Native, or Islander Pacific, veterans and/or people with disabilities,” and “Globally, candidates who accepted remote job offers were more likely to be women.”

In Tesla’s latest Impact 2021 Report, published in May 2022, the company boasted about how it keeps employees feeling connected even as they work from remote offices.

The report said: “During the global pandemic, we have focused heavily on expanding our community involvement and ensuring our employees stay connected. Specifically, we have expanded our Employee Resource Groups (ERGs) and ensured that our programs are accessible in a remote work environment… That our employees feel heard and connected more than ever as they have focused on virtual events to promote inclusion across different locations, physical boundaries, and time zones.”

The company did not release figures for the number of employees it allowed to work from remote locations before and after the pandemic began, or how that affected the demographic mix of its workforce.

Tesla did not respond to a request for comment.

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