The layoffs centered on Tesla’s offices in San Mateo, California, where employees were working on the company’s driver-assistance feature Autopilot. Many of those affected were reportedly hourly workers tasked with labeling training data. Such work is essential for developing AI systems but often low-skilled and low-paid. In recent years, many companies have turned to cheaper sources of labor in less-developed countries to collect this input.
Data labelling is essential to developing AI systems like Autopilot
TechCrunch reports that Tesla’s San Mateo office originally had a headcount of 276. Some 195 employees have been laid off, says the publication, including data labelers, analysts, and supervisors, leaving 81 employees who will reportedly be relocated to another office.
As of the end of 2021, Tesla had 99,290 employees worldwide. Earlier this month, Musk said he had a “super bad feeling” about the US economy and that Tesla was “overstaffed,” prompting the layoffs. Originally, Musk said job losses would primarily affect salaried workers, but later reports said (and the San Mateo layoffs show) that hourly workers are also under threat.
Tesla’s methods for reducing its headcount have sometimes been controversial. Two former employees recently filed a lawsuit against the company, claiming that Tesla violated federal law by failing to provide 60 days’ notice before conducting a mass layoff at its Gigafactory facility in Nevada. In TechCrunch’s report on the San Mateo layoffs, sources told the publication that most of the workers were terminated based on performance — meaning Tesla would not be required to give advance notice of the firings.