Tesla dismantled the data annotation team that worked on Autopilot, laid off nearly 200 employees and closed the San Mateo, California office where they worked. The layoffs, first reported by Bloomberg, have been confirmed by sources who have spoken to TechCrunch on condition of anonymity.
The cuts come amid wider job cuts at Tesla. However, these layoffs targeted personnel once deemed critical to the company’s advanced Autopilot driver assistance system and more specifically CEO Elon Musk’s efforts to further develop automated driving functions through the optional $12,000 FSD system.
To this day, Tesla had hundreds of data annotation employees on the Autopilot team in San Mateo and Buffalo, New York. The San Mateo office had a staff of 276, and after the layoff of 195 staffers from all ranks – supervisors, labelers and data analysts – the team is left with 81 employees, who will be moved to another office, sources say.
Most workers had average low-skill, low-pay jobs, such as Autopilot data labels, which determine whether Tesla’s algorithm identified an object well or badly, according to one source.
According to the source, layoffs from this team have been on the table for months and the work would be handed over to Buffalo.
Based on data from Glassdoor, jobs as data annotation specialists or data analysts at Tesla pay less in Buffalo than in San Mateo. It’s unclear whether Tesla is moving employees to the New York office to cut costs or as a strategy to qualify for New York State’s many employment incentives, such as the New York Youth Jobs Program tax credit or the credit for employing persons with disabilities.
That said, it probably won’t be a 1:1 replacement in Buffalo, where sources say Tesla will likely just overwhelm the existing team, “as is the Tesla way. Act now, deal with consequences later.”
Indeed, if Tesla isn’t going to hire more data labels and others to work on Autopilot — which the company says is an essential ingredient for training deep neural networks that can help improve full self-driving beta software — what happens to that technology? Perhaps Tesla will change course on its vision-only approach to autonomy and introduce lidar and radar in its vehicles.
Layoffs or terminations?
While sources confirm that the 195 Autopilot team members fired on Tuesday were indeed fired, they also say that most of the “layoffs” that began in late May were actually layoffs based on performance.
By firing employees on the basis of performance, any company can avoid having to comply with certain legal requirements, such as the WARN Act (Warnings and Retraining of Employees Act), which ensures advance notice in the event of of qualified factory closures and massive layoffs.
Indeed, last week, two former Tesla employees filed a lawsuit against the automaker, alleging that the company failed to provide 60 days’ notice by federal law during its recent layoffs.
A class action lawsuit is also pending against Tesla, which sources say is recruiting more rejected employees every day.
Tesla shares fell 5% in after-hours trading on Tuesday.