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Tesla Forced to Lay Off Over 50% of Battery Assembly Workers in Shanghai

Canaccord Genuity just cut his price target on $TSLA from $267 to $234

Tesla’s massive Shanghai Gigafactory has started slashing jobs in its battery assembly division, sources revealed this week. According to inside sources, over 50% of workers in the initial phase of battery assembly are getting pink slips, though most are getting a decent severance.

Allegedly, the severance for this culling round is mostly N+3, meaning a number of monthly salaries equal to years worked plus 10K RMB ($1.4K), some only got N+2 or N+1+1, insiders spilled. Base pay for Shanghai battery workers isn’t exactly a king’s ransom either, a measly 4K RMB ($560) a month, With bonuses and OT, they can squeak by on 7K RMB ($1K), best performers can land up to 16 months’ pay, typically 14 months though. After this layoff, workers may receive a one-time compensation of RMB 20,000 to 40,000.

Rumor has it the powers that be think this downsizing has everything to do with U.S, government won’t subsidize batteries from China, see, demanding locally made batteries instead. So Tesla’s big battery export biz from Shanghai land went kaput, leaving gobs of idle hands. And we all know Tesla hates inefficiency as much as the next guy.

Not just workers feel the burn either, Tesla’s battery suppliers like CATL and LG Nanjing have to change up their game plans and investments, pronto. CATL’s now pushing energy storage, and LG’s desperately dialing for dollars elsewhere.

Why’d Tesla scale up so fast if demand might dive? Will U.S. protectionism ultimately hurt or help? While this news is certainly disappointing for Tesla and its workers, it is a reminder of the volatile nature of the auto industry and the importance of adapting to changing policies and market conditions.

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