Tesla to slash nine percent of workforce, slammed by insurers

Tesla to slash nine percent of workforce, slammed by insurers

Electric car maker Tesla has announced that it is cutting nine percent of its workforce, in what founder and CEO Elon Musk has described as both a “difficult, but necessary reorganisation” and a “comprehensive organisational restructuring”.

Musk confirmed the news in a tweet this morning, which shared the text of an internal email that broke the news to staff.

“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,” wrote Musk.

“As part of this effort, and the need to reduce costs and become profitable, we have made the difficult decision to let go of approximately nine percent of our colleagues across the company.”

Profit vs mission

Musk added that making money has not been a motive throughout Tesla’s 15-year history, during which it has never turned a profit.

However, Musk’s announcement today made clear that while the company is still motivated by its “mission to accelerate the world’s transition to sustainable, clean energy”, it will “never achieve that mission” unless it demonstrates that it “can be sustainably profitable”.

No production associate roles have been impacted by the cuts, added Musk, meaning that Tesla’s need to hit production targets for its Model 3 will apparently not be affected.

On Monday, Internet of Business reported that Tesla hopes to hit a production target of 5,000 Model 3s a week by the end of this month – a figure that it needs to reach to avoid raising new investment.

Insurers slam Tesla

We also reported that the company is rolling out more self-driving capabilities to its cars in August, according to another tweet from Musk. However, Tesla is one of several companies to be slammed in a BBC report this morning on the self-styled autonomous driving sector.

The Association of British Insurers said that the way some advanced vehicles are described “can convince motorists that they have self-driving cars when that is not the case”.

Thatcham Research, which conducts safety tests for the motor insurers, said that car manufacturers need to be far clearer about the difference between driver-assistance systems and autonomous cars.

While Tesla has always emphasised that, at present, its Autopilot software is a driver-assistance technology – and has actively sought to correct any use of the word ‘autonomous’ to describe it – the software’s name is itself deeply misleading, according to Thatcham Research.

“Misleading names such as ‘Autopilot’ and ‘ProPilot’ give drivers the impression their cars can drive themselves in all circumstances”, said the BBC report, which provided an example of the dangers of over-reliance on the software. 

Put another way, Tesla called its application ‘Autopilot’ and has spent a great deal of time and effort since then contacting media outlets to explain that it isn’t an autopilot.

This morning, Internet of Business asked Tesla whether it would rename its software in the interests of driver safety and to avoid the risk of future misunderstandings. Tesla did not answer our question directly – despite being asked it several times today, and in previous correspondence.

However, the company did send this response: “The feedback that we get from our customers shows that they have a very clear understanding of what Autopilot is, how to properly use it, and what features it consists of.

“When using Autopilot, drivers are continuously reminded of their responsibility to keep their hands on the wheel and maintain control of the vehicle at all times. This is designed to prevent driver misuse, and is among the strongest driver-misuse safeguards of any kind on the road today.

“Tesla has always been clear that Autopilot doesn’t make the car impervious to all accidents and the issues described by Thatcham won’t be a problem for drivers using Autopilot correctly.”

Yet in March, the driver of a Tesla car was killed on Highway 101 in California, while the vehicle was operating under the control of its driver-assistance technology. The company was criticised by road safety authorities in the US for releasing details of the accident without notifying them first.

While the exact cause of the crash has yet to be confirmed, it appeared, from multiple reports at the time, as though the driver had trusted the software to control the vehicle safely and, as a result, may have neglected his own safety by ignoring Tesla’s instructions. 

If true, this suggests that not all drivers have the clear understanding of the technology that Tesla claims. Indeed, the driver who lost his life worked for a technology company, Apple, and so can hardly be considered a novice in software terms.

Tesla announced this morning that it is updating the ‘Hold steering wheel’ alert on Autopilot to be more insistent, in response to safety complaints – suggesting that it is all too aware of the risk.

Internet of Business says

News of Tesla’s reorganisation shows that the company is no longer operating in the realm of privately funded idealism, and is now addressing the need to be profitable and sustainable – to meet its own clearly stated goals.

Like Steve Jobs and others before him, Musk is an impressive, driven, charismatic leader, and a serial entrepreneur whose personal vision is starting new conversations, and persuading people to think in new ways. For all that, and for his commitment to clean energy, sustainability, imagination, and the use of his personal wealth to affect change, he should be commended.

However, we strongly agree with Thatcham’s belief that ‘Autopilot’, while a catchy name for a piece of software, is a deeply misleading word – indeed, we have made the same point in multiple reports on this website, and put it to Tesla several times.

While keen to engage with Internet of Business in debates about autonomy and terminology – to which it responds immediately – Tesla has never responded to our direct question about whether it will change Autopilot’s name in the interests of driver safety, despite repeated attempts.

The media may be partly to blame for consumer misunderstandings by using the word ‘autonomous’ inappropriately from time to time, but that is partly because of applications called ‘Autopilot’ and the like – which, in Tesla’s case, are constantly evolving and adding self-driving features. Indeed, the application’s name would appear to be a risky bet on the future – just like the company itself, in fact.

However, if changing the application’s name saves even one life, then it is surely a change worth making.

We urge Tesla to do just that. Such a change would surely be in line with its long-held belief in making travel safer and more sustainable. It’s time for the company grow up and take responsibility for its own actions, and not just for its future profits.