Tesla to Close San Mateo Office

American multinational electric vehicle maker Tesla Inc will close its San Mateo office, a move that will cost the electric car maker 200 jobs.

As CNBC reported, citing several affected employees, who spoke on condition of anonymity, the layoffs were unexpected because most knew that the outpost lease was coming to an end.

The San Mateo office is specifically dedicated to Tesla’s Autopilot development. The team working there helps interpret and analyze video data collected from the company’s cars to improve driver assistance systems.

Despite making targeted investments in the Autopilot program, Tesla Inc (NASDAQ: TSLA) has yet to deliver on its promise to bring highly efficient driverless cars to market. There is no confirmation whether this affected schedule contributed to the closure of the San Mateo office. After all, layoffs are one of the company’s efforts to reduce costs in difficult economic conditions.

Affected employees were notified live, according to a voice recording obtained by CNBC. “They know our lease ends here in San Mateo,” said a Tesla executive in the San Mateo office, telling workers that efforts were underway to move employees to the new Palo Alto, California office.

“Unfortunately, we can’t,” he said. “That means we have a reorganization and your position is affected.” Affected employees will be offered a generous severance package that takes into account their years of active service at Tesla. With a guaranteed 60 daily wage, affected employees are expected to say goodbye before the end of the week.

Tesla layoffs, cross-industry threat

Tesla’s 200 layoffs are not a unique trend in the electric vehicle industry, but a broad challenge faced by most companies as a result of the current global economic crisis.

The digital currency ecosystem took a major hit when public exchange Coinbase Global Inc (NASDAQ:COIN) laid off about 18% of its workforce, a trend that inherited Gemini’s 10% staff cut.

As these companies developed their own cost-cutting strategies, Tesla in particular struggled to maintain its global operations as it was plagued by supply chain issues across the board, in addition to inflation.

Tesla CEO Elon Musk once complained that his GigaFactories in Berlin and Texas were losing money because the company couldn’t deliver as expected.

“The factories in Berlin and Austin are huge money-making machines right now,” Musk said in a taped interview on May 30 with a Tesla-backed fan club called Tesla Owners Silicon Valley. “It should be like a great roaring sound, which is the sound of money burning.”