Ronn Torossian Commentary On Tesla’s Job Cuts Announcement


Tesla Argues for Autopilot SafetyTesla is still setting the standard in the fully-electric car market, but the company is also at a crossroads, both with production and with public relations. Over the past few years, the Tesla brand has seen some ups and downs, from wowing people with new models to frustrating customers with production delays. 

Now, though, the company is trying to determine how to continue to build on its positive brand reputation while making business-related adjustments in order to stay profitable. The latest headline about the company reflects this challenge. Several media outlets are reporting that Tesla says it will cut about 7 percent of its overall workforce as the company tries to find a way to make more affordable cars for a wider consumer base. At present, the starting price of Tesla’s least expensive model is over $40,000, more than most customers are willing to pay for, essentially, a family sedan. 

So, in an effort to bring down costs, the company is turning to staff cuts, news that has not been greeted warmly by the Tesla team, and has received mixed responses from auto industry media and consumers. 

In order to stay ahead of the narrative on this issue, CEO Elon Musk sent a letter to his staff announcing the decision:

“Looking ahead at our mission of accelerating the advent of sustainable transport and energy, which is important for all life on Earth, we face an extremely difficult challenge: making our cars, batteries and solar products cost-competitive with fossil fuels… While we have made great progress, our products are still too expensive for most people.” 

In this brief statement, Musk creates a compelling narrative. First, he sets the stage by underscoring the focus of the entire Tesla team: moving the needle on sustainable transport and energy. 

Next, Musk sets the perimeters for his vision: benefiting all life on earth. From that auspicious goal, Musk pivots to the challenge: their vehicles are still too expensive for most consumers. That, he implies, must change if “we” are to reach “our” collective goal and remain profitable.  

As far as layoff announcements go, this one is framed pretty well. First, notice the collective language that, implicitly brings the team together. 

Musk also focuses on the big picture, the overarching vision, as well as the specific challenge that must be solved. That will not mean much to the 3,150 people who will likely lose their jobs, however, layoffs are sometimes necessary in business. And, when it’s necessary, it’s best to have a clear, understandable reason than a vague or condescending message or, perhaps worse, no message at all.

About the Author: Ronn Torossian is CEO of 5WPR, a leading PR agency.