Musk axes entire Tesla division

"This shows the importance of respecting and incorporating management’s judgment," said consultant Garin Rouch

Elon Musk, CEO of e-car firm Tesla, decided to fire an entire division at the company after the division chief refused to make further redundancies.

Musk met with the chief of the electric car manufacturer's supercharger division last month (28 April), Rebecca Tinucci, who had laid off around 15% to 20% of her team two weeks earlier as part of wider layoffs at the company, Reuters reported.

Tinucci refused to make further layoffs and on 29 April Musk sent an email to staff that said he was dissolving the entire supercharger team. Musk has since rehired some workers in the division.

Musk's decision showed that ignoring managers' judgment could lead to avoidable lay offs, explained HR consultant Garin Rouch.

Speaking to HR magazine, he said: "This shows the importance of respecting and incorporating management’s judgment. The division chief, who had already laid off 15 to 20% of her team, did not want to make further cuts.

"This insight should have been a crucial consideration in the decision-making process. Ignoring such insights can lead to hasty and regrettable decisions."

Rouch stated that if mass layoffs cannot be avoided, they should be handled as sensitively as possible.

He continued: "Mass layoffs should be prevented at all costs. However, if you have no alternative, they need to be handled as a strategic and humane process.

"Handling mass layoffs effectively requires a balanced approach that combines strategic planning, compassionate communication and robust support systems. This ensures a fair and transparent process that upholds the company’s integrity and maintains employee trust."

Read more: Elon Musk’s new Tesla hiring policy ‘disrespectful to HR’

HR should focus on creating a supportive culture to avoid further incidents of mass layoffs, recommended Eleanor Tweddell, founder of consultancy Another Door.

She told HR magazine: “If HR can work on creating cultural shifts, supporting leaders to lead and think differently, then lay offs get handled completely differently. 

“Leaders and organisations might see this as more about creating a safe place to work, as a strategic business goal.”

Rouch noted that HR should offer enhanced support for outgoing staff.

He said: "For the employees who are leaving, showing empathy and providing support are crucial. Offering more generous severance packages (not just statutory), extending any benefits they receive, and providing career outplacement can significantly ease their transition.

"Exit interviews are also valuable for understanding their concerns and gathering feedback for future improvements."

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HR should train managers in how to communicate with and support remaining employees, Tweddell added.

She continued: "Training line managers to support staff while also keeping things going with team that are staying is not easy. Manager support groups are very impactful during mass layoffs where people can support each other, to support their employees."

Emma Christian, people consultant at employment law and HR firm AfterAthena, told HR magazine that HR should encourage remaining employees to share their concerns following mass layoffs.

She said: "HR can help promote a positive work environment post-change by encouraging open dialogue and providing channels for employees to express concerns.

"By addressing these aspects, HR can alleviate the negative impacts of mass redundancies, support outgoing employees, and retain and motivate the remaining workforce effectively."