Tesla, Inc. (NASDAQ: TSLA) shares fell nearly 2 percent early trading hours on Monday after an announcement that hundreds of workers would be fired in order to speed up the Model 3 production, first reported by Mercury News.
Tesla had fired the workers as part of an annual performance review, but Tesla also said that it was not a layoff.
Tesla did not verify the amount of workers that would be let go, but did confirm that employees would be “fired.” It is estimated that up to 700 employees will be fired.
“As with any company, especially one of over 33,000 employees, performance reviews also occasionally result in employee departures,” Tesla spokesman told Mercury News, “Tesla is continuing to grow and hire new employees around the world.”
Mercury had interviewed Tesla workers, and had told the news company that there were no forewarnings about the “performance review” and it came as a surprise to most.
Tesla has already been facing difficulty in mass producing the Model 3. In the third quarter vehicle deployment and production report, Tesla was only able to deploy 220 Model 3s, which fell short by a significant amount of 1,500 that the company had forecasted 82 percent lower to be exact.
In the second quarter, Tesla stated that the company hopes to produce 5,000 Model 3s per week towards the end of 2017, and double the rates by 2018. Eventually, the company hopes to achieve production rates 500,000 annually.
Tesla said also said in the third quarter report that the company “understand what needs to be fixed” and that it is “confident of addressing the manufacturing bottleneck issues in the near-term.”
The employee layoff, or the performance review, could be Tesla’s initiative to bolster its production and deployment rates. Tesla will now be looking for fresh and new experts in the field to ramp up productions.