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Tesla closes Silicon Valley office, lays off 200 employees

Tesla told employees on Tuesday it was closing its office in San Mateo, Calif., and cutting 200 jobs there as part of the electric vehicle maker’s efforts to downsize its workforce to save money.

San Mateo office staff had helped improve Tesla’s Advanced Driver Assistance System, or Autopilot. According to people familiar with the matter, more than half of the staff of this office have been informed of the loss of their jobs. The remaining employees will be moved to another office, according to the Wall Street Journal.

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A Tesla charging station in a Tesla showroom features the manufacturer’s logo. (Christophe Gateau/photo alliance via Getty Images/Getty Images)

Bloomberg previously reported on Tesla’s plan to shut down the facility. Most of the jobs cut were filled by hourly workers, although CEO Elon Musk said in an interview last week that he planned to add hourly workers but cut salaried staff by 10%.

The move comes after Musk warned he had a “super bad feeling” about the economy. Reuters reported that Musk told his executives to “suspend all hiring globally.” Musk’s directive comes amid growing worries about a possible recession.

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Tesla car

A Tesla vehicle drives past a Tesla factory. (REUTERS/Stephen Lam/Reuters Photos)

Musk recently said Tesla’s new factories in Texas and Germany were losing “billions of dollars,” in part because of supply chain issues affecting the company’s ability to ramp up production at each factory.

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“The factories in Berlin and Austin are currently gigantic furnaces of money,” Musk said at the time. “It should be like a giant roar which is the sound of burning money.”

Elon Musk at the Metropolitan Museum of Art

Elon Musk attends the Metropolitan Museum of Art’s Costume Institute benefit gala celebrating the opening of the exhibition ‘In America: An Anthology of Fashion’ on May 2 in New York City. (Evan Agostini/Invision/AP/AP Newsroom)

Supply chain disruptions since the start of COVID-19 two years ago have been particularly debilitating for automakers, which get parts from all corners of the globe. The lack of computer chips needed to run car computers has compounded automakers’ problems and sent new and used car prices skyrocketing.

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Tesla recently raised the prices of its fleet of cars significantly, and the company’s shares lost 38% of their value in less than three months.

According to SEC filings, Tesla and its subsidiaries employed nearly 100,000 people at the end of 2021.

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