Elon Musk speaks at the World Auto News Conference at the Renaissance Center in Detroit, Michigan.
Rebecca Cook | Reuters
Tesla is closing its San Mateo, California office, and cutting an estimated 200 jobs there, CNBC confirmed, as part of a broader cost-cutting effort at the electric car company.
At the San Mateo facility, hundreds of employees have been tasked with grading videos from the company’s vehicles in order to improve their driver assistance systems, marketed as autopilot. Bloomberg first reported office closures and layoffs.
Two employees affected by the layoffs told CNBC on Tuesday that they knew Tesla’s lease was coming to an end. The workers asked not to be named because they were not authorized to speak on the matter.
Tesla, which has yet to deliver on its robotaxi technology promise, previously moved a number of Autopilot data employees to its Palo Alto, California, site. The company has also recruited and trained data annotation teams in Buffalo, New York. The employees said that some San Mateo office employees trained the teams in Buffalo.
Typical data annotation functionality in Tesla involves identifying and describing objects in short clips captured by cameras and sensors in Tesla cars. Data compilers sometimes need to identify overlapping objects, such as a wheel in front of a sidewalk or a pedestrian obstructing the full view of a stop sign. They are rated based on the exact number of clips they can comment on within short periods of time.
Most developers of driver assistance and automated driving systems outsource at least some of their data-tagging work to companies like Amazon’s Mechanical Turk, Cloudfactory, Hive AI, and Appen.
One employee told CNBC that a lot of employees in San Mateo were expecting to be moved to Palo Alto or to another office, but they wouldn’t lose their jobs.
CNBC also obtained an audio recording of a meeting on Tuesday, during which a manager told Tesla Autopilot data teams about the layoffs.
“You knew our lease was going to end here in San Mateo,” said the manager. She told workers that the company had gone to great lengths to try and bring the entire autopilot team based in the San Mateo office to the new site in Palo Alto.
“Unfortunately, we couldn’t,” she said. “What that means is that we have a restructuring in place and your positions are affected.”
Employees at the meeting were told that they would be paid in full for the next 60 days, but that June 28 would be their last working day. They were asked to leave their laptops and badges immediately at their desks, and were informed that emails containing termination and benefits information would be in their inbox.
Severance packages are expected to include compensation based on years of service with the company and an additional two months of benefits, to extend coverage through October 31.
As CNBC previously reported, Tesla is in the midst of cutting about 10% of the number of salaried employees. However, it plans to add more hourly workers over time.
Tesla CEO Elon Musk said in an interview published last week that Tesla’s new plants in Texas and Berlin are losing “billions of dollars” in part due to supply chain disruptions that have hampered the company’s ability to ramp up production at both facilities.
“Both the Berlin and Austin factories are huge money furnaces right now,” Musk said in a May 30 interview with a company-endorsed fan club called Tesla Owners Silicon Valley. “It should be like the sound of a giant roar and the sound of money burning.”
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