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Fact checking Elon Musk on his Tesla layoff letter (and how the layoffs could've been predicted)

1 year ago by James Mattone in People

Days after announcing layoffs at SpaceX ($SPACEX), Elon Musk wrote a letter to his other employees at Tesla ($NASDAQ:TSLA) announcing that 7% of its full-time workforce would be let go as well. 

In the letter, Musk brings up several numbers when describing the company's growth, including employee count. Using our data, we're able to cross-reference Musk's data with external data to see what's what.

Spoiler alert: his numbers are accurate, and investors shouldn't be too surprised at the layoffs.

"we grew by 30% last year, which is more than we can support"

On LinkedIn ($NASDAQ:MSFT), Tesla employees are able to self-report that they work for the company, giving other users an idea of how many people work there.

Looking at the data, we saw an 43.44% increase of self-reported Tesla employees year to this date, with this percentage increase slowing over time since January 2018. Given the margin of error that could come from "phantom accounts," or from contract/non-full time employees who state that they work for Tesla, Musk is reasonably truthful in stating that Tesla grew by about 30% over the past year.

Another, more obvious, way to check this claim is to look at the self-reported employee count that the company had to state in public documents. Given Elon Musk's Tweet in November of the company having "45,000 employees," putting that number within other publicly available records of Tesla employee counts since 2008, the amount of growth Tesla had this year becomes a bit murkier.

Going solely by metrics that Elon Musk himself reported, the company technically saw a growth of 16.57%, almost half of what Musk said in his letter.

Again, this could change when the Q4 results come out, but in order to make up this ground, the company would need to have hired a few thousand employees between November and now.

"we delivered almost as many cars as we did in all of 2017 in the last quarter alone"

Here, we go back to publicly available and self-reported data.

Including the recently-reported Q4 shipping statistic of 90,700 vehicles, Musk is definitely telling the truth when it comes to how many cars his company delivered, and it just goes to show how much the company has grown since 2015.

Still, this number may not be enough to quell warnings of Q4 sales that Musk is giving ahead of the company's earnings report.

Predicting the fall

This year, there was already a cut in Tesla jobs when 9% of staff was reduced in June.

Looking through the company's official job openings page, we saw a timely drop in postings right around the days where Tesla cut positions. Approaching today, a similar, non-seasonal, fall in job openings occurred in the week before Musk's letter went public.

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James Mattone

James is the Associate Editor at Thinknum Media, mainly covering video games, food, and tech news, but not afraid to head into Sephora or beauty brands if need be...

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