Tesla Reportedly Lays Off Nearly 200 Employees, Closes San Mateo Office

Tesla has laid off around 200 employees on its autopilot team and will close its San Mateo, California, office, according to reports.

The layoffs, which were first reported by Bloomberg, reportedly mostly affected hourly data annotation roles.

Reuters previously reported that Tesla was looking to lay off 10% of its employees and pause hiring, as CEO Elon Musk told executives he had a “super bad feeling about the economy.” The San Mateo office had about 276 employees. With 195 laid off, the rest will be relocated to another office, according to TechCrunch.

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Austin, Texas-based Tesla is the latest tech company to initiate layoffs amid a market downturn, and one of the most high-profile ones. Other public tech companies that have laid off staff include Netflix, which went through two rounds of layoffs, and PayPal.

Continuing turmoil in the public markets, inflation and rising interest rates have caused companies to reassess their costs. Headcount is usually a business’ largest expense. Companies like Uber and Microsoft have said they’ll slow down or even pause hiring, while others have laid off workers.

The layoffs (for now) have mostly affected the tech sector. More than 22,000 employees of U.S.-based tech companies been laid off so far this year, with late-stage startups hit the hardest, according to a Crunchbase News analysis.

It’s a stark contrast to last year, when startups were raising record amounts of venture capital at rapid speed, and both public and private tech companies saw their valuations soar. Companies went on hiring sprees and competed fiercely for talent, but it looks like they’re pumping the brakes now.