Tesla struggles with Elon Musk’s strict back-to-office policy

Tesla CEO Elon Musk enacted a strict back-to-work policy this spring, suddenly telling employees via email on May 31 that they should “spend at least forty hours in the office a week.” Everything else, he suggested, was “phone it.”

Three months after the edict, Tesla still doesn’t have the space or the resources to bring all of its employees back to the office, according to people who work for the company in the United States and internal documents seen by CNBC. The individuals declined to be named because they were not authorized to speak to the press on behalf of the company.

The back-to-office policy has also caused a drop in morale, especially among teams that allowed employees to work remotely as needed before Covid-19.

In general, Tesla was open to remote work among employees in office positions before the pandemic. As the company’s workforce grew in recent years, the focus was on building international centers and a new factory in Texas. It hasn’t built enough new workspaces or acquired enough office equipment at existing facilities in Nevada and California to bring all office workers and long-term contractors into forty hours a week. .

According to several people who currently work there, Tesla recently wanted to bring its San Francisco Bay Area employees to the office 3 days a week, but the lack of chairs, desk space, parking spaces and other resources turned out to be too important. (Some of this has already been pointed out by Information.) Instead, Tesla reduced staggered work hours to two days a week.

Even simple supplies like dongles and charging cords have been in short supply. On days when more employees must work onsite, crowded conditions force people to take phone calls outside, as Tesla has never built enough conference rooms and phone booths to accommodate so many. employees present at a time.

The company now monitors employee attendance, with Musk receiving detailed weekly absenteeism reports.

In early September, internal records show, about an eighth of employees were absent on a typical day in Fremont, Calif., where Tesla’s first U.S. vehicle assembly plant is located. Across Tesla, that number was only marginally better, with about a tenth of employees absent on a typical work day.

The numbers have remained within that range since March 2022, before Musk’s orders, according to internal reports viewed by CNBC. Absenteeism increases on weekends and around public holidays, as might be expected.

Absenteeism at Tesla is measured using data from workers checking into facilities, with unplanned absences divided by planned leaves to compile daily totals, according to internal records and people familiar with the reports sent. to Musk.

Not all employees are tracked in the same way. Direct reports to Elon Musk do not count their badges for internal reporting, for example.

The back-to-office policy — obscure and informal as it is — has caused a significant drop in morale for some employees, according to internal posts seen by CNBC.

Prior to the COVID-19 restrictions, Tesla officials typically assessed the appropriate amount of remote work for their teams. Musk’s hardline policy has eliminated that freedom in theory, although some executives can still make deals for “exceptional” employees.

In early June 2022, just after Musk mandated 40 hours onsite for everyone, Tesla did drastic reductions in its workforce. Employees who were previously designated as remote workers but could not relocate to be in the office 40 hours per week had until September 30 to relocate or take severance pay from Tesla.

About a week after making this offer internally, Tesla HR asked people who lived far away if they planned to move and work in a Tesla office 40 hours a week. Some of those who said they weren’t sure they could move, or who said they absolutely couldn’t move, were fired in June without warning, according to internal correspondence read by CNBC and two people directly aware of the layoffs.

The policy has also drained some of Tesla’s power to recruit and retain top talent. At least a few valued employees quit because they wanted more flexible arrangements, according to internal correspondence and two resignations confirmed by CNBC.

Some workers who used to live away from a Tesla office now live hours away from family to meet the new requirements, an employee told CNBC.

This employee said he was most concerned about Tesla’s immigrant workers, who could lose their visas if the company suddenly decides to terminate their employment during the shifting tenure.

They were also concerned about how Tesla’s narrow-mindedness toward remote working might meet the company’s diversity goals.

In its 2022 diversity report, released in July Meta revealed that: “American applicants who accepted remote job offers were significantly more likely to be Black, Hispanic, Native American, Native American, Pacific Islander, veteran, and/or people with disabilities” and “Overall, applicants who accepted remote job offers were more likely to be women.”

In Tesla’s latest 2021 Impact Report, which it released in May 2022, the company bragged about how it made employees feel connected even when they were working. from remote offices.

The report states, “During the global pandemic, we have been very focused on expanding our community engagement and ensuring our employees stay connected. Specifically, we expanded our Employee Resource Groups (ERGs) and ensured our programming was accessible in a remote work environment. ..We made sure our employees felt more heard and connected than ever before as they turned to virtual events to promote inclusion across different locations, physical borders and time zones.”

The company didn’t give numbers on how many employees it allowed to work remotely before and after the pandemic began, or how that impacted the demographics of its workforce. work.

Tesla did not respond to a request for comment.