Strict Return-to-office policy: Tesla struggles, Staff on low morale

More than three months after Elon Musk’s back-to-office edict, Tesla still doesn’t have the room or resources to bring all its employees back to the office, sources say, according to report by Lora Kolodny @lorakolodny

CEO Elon Musk enacted a strict return-to-office policy this spring, informing employees suddenly by email on May 31 that they would need to “spend a minimum of forty hours in the office per week.” Anything else, he suggested, was “phoning it in.”

Three months since this edict, Tesla still doesn’t have the room or resources to bring all its employees back to the office, according to people who work for the company in the United States. The people declined to be named because they were not authorized to talk to the press on behalf of the company.

The return-to-office policy has also caused a decline in morale, especially among teams that allowed employees to work remotely as needed before Covid-19. Tesla had been open to remote work among employees in office roles before the pandemic. As the company’s workforce expanded in recent years, the focus was on building out international hubs and a new factory in Texas. It did not build enough new workspaces or acquire enough office equipment at existing facilities in Nevada and California to bring all office employees and long-term contractors in forty hours per week.

According to several current people who work there, Tesla recently wanted to bring its employees in the San Francisco Bay Area to the office for 3 days per week, but a shortage of chairs, desk space, parking spots and other resources proved too much.  Instead, Tesla set staggered in-office schedules back to two days per week.

Even simple supplies like dongles and charging cords have been in short supply. On days where more employees are scheduled to work on-site, crowded conditions send people to take phone calls outdoors, as Tesla never built enough conference rooms and phone booths to accommodate this many employees in attendance at once.

A hit to morale
In early September, internal records show, about one-eighth of employees were out on a typical day in Fremont, California, the home of Tesla’s first U.S. vehicle assembly plant. Across all of Tesla, that number was only slightly better, with about one-tenth of employees absent on a typical workday.

Before COVID-19 restrictions, Tesla managers generally figured out how much remote work was appropriate for their teams. Musk’s hardline policy eliminated that freedom in theory, though some execs may still be able to carve out deals for “exceptional” employees.

In early June 2022, right after Musk mandated 40 hours on site for all, Tesla made steep cuts to its headcount. Employees who were previously designated as remote workers but who could not relocate to be in the office 40 hours a week were given until September 30 to move or take a severance package from Tesla.

About a week after making that offer internally, Tesla HR asked people who lived far away whether they planned to move and work in a Tesla office 40 hours a week. Some of those who said they were not sure if they could relocate, or who said they definitely could not move, were dismissed in June without warning.

The policy has also depleted some of Tesla’s power to recruit and retain top talent. At least a few well-liked employees quit because they wanted more flexible arrangements, according to internal correspondence.

This employee said they worried most of all about immigrant workers at Tesla, who could lose their visas if the company suddenly decides to terminate their roles over the shifting attendance mandate.

They also worried about how Tesla’s closed-mindedness about remote work could hit the company’s diversity goals.

The company did not break out numbers for how many employees it allowed to work from remote locations before and after the pandemic began, or how that impacted the demographic mix of its workforce. (Sources: on CNBC. Reuters)

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