Return to the office or get out: Elon Musk’s ultimatum

Tesla struggles with Elon Musk's strict return to office policy


key Points: 

  • According to insiders, Tesla still lacks the space and funds to welcome all its employees back to the office more than three months after Elon Musk’s back-to-office directive.
  • Currently, the corporation monitors employee attendance, and Musk and other executives receive detailed weekly reports on absence.
  • In June, some individuals who had previously been designated as remote workers but had indicated they might not be able to change their location to comply with the return-to-office criteria were let go.

Elon Musk, the CEO of Tesla, enforced a stringent return-to-work policy this spring. On May 31, he unexpectedly informed staff members via email that they would need to “spend a minimum of forty hours in the office every week.” He stated that anything less was “phoning it in.”

According to insiders who work for the firm in the United States and internal documents seen by CNBC, Tesla still does not have enough space or resources to bring all its employees back to the office three months after this directive. Because they were not allowed to speak to the press on behalf of the company, the individuals chose not to give their names.

Before the pandemic, Tesla had a generally positive attitude toward office workers working remotely. As the company’s personnel increased in recent years, the focus has been on developing global hubs and a new facility in Texas. At existing locations in Nevada and California, it did not build enough additional workspaces or buy enough office supplies to staff all office workers and long-term contractors for forty hours each week.

A recent attempt by Tesla to send its employees in the San Francisco Bay Area to the office three days a week failed due to a lack of chairs, desk space, parking spaces, and other resources. (The Information has previously covered some of this.)Tesla reduced in-office hours to two days weekly instead of adopting a staggered schedule.

Even basic supplies like charging cords and dongles are in short supply. There aren’t enough conference rooms and phone booths in Tesla’s buildings to hold this many employees in attendance at once, so on days when more staff are planned to work on-site, crowded conditions force people to make phone calls outside.

According to internal data, in Fremont, California, the location of Tesla’s first U.S. vehicle assembly factory, around one-eighth of workers were absent on a typical day in early September. Only slightly better, with around one-tenth of employees missing an average workday across the board for Tesla.

According to internal assessments seen by CNBC, the figures have been within that range since March 2022, which predates Musk’s orders. As one might anticipate, weekends and holidays are when absenteeism is most prevalent.

According to internal documents and sources familiar with the reports delivered to Musk, Tesla measures absenteeism using information from employees who check into facilities. Unplanned absences are then divided by scheduled time off to calculate daily totals.

Not every employee is monitored in the same way. For example, the badge swipes of Elon Musk’s direct reports are not considered when generating internal reports.

Internal messages seen by CNBC indicate that some employees’ morale has significantly declined due to the unclear and unofficial return-to-office policy.

Tesla managers often determined how much remote work was appropriate for their teams before COVID-19 regulations. Though some executives could still be able to negotiate packages for “exceptional” staff, Musk’s strict policy theoretically eliminates such opportunity.

In June 2022, just after Musk required 40 hours per week on the job for everyone, Tesla implemented significant staff reductions. Employees previously allowed to work remotely but couldn’t move to an office where they could work 40 hours per week had until September 30 to move or accept a severance settlement from Tesla.

One Tesla employee told CNBC that some employees who previously commuted a long way to the company’s offices are now living several hours away from their families to comply with the new rules.

This employee expressed concern for immigrant workers who risk losing their visas if Tesla decides to fire them unexpectedly due to the fluctuating attendance mandate.

They were also concerned about how Tesla’s opposition to remote employment may affect the company’s diversity objectives.

According to the report, we put a lot of effort into growing our community participation and ensuring our employees stayed engaged during the global pandemic. In particular, we increased the number of our Employee Resource Groups (ERGs) and ensured remote workers could access our programming. We made sure that, as they shifted to virtual events to foster inclusiveness across various locations, physical borders, and time zones, our employees felt more heard and connected than ever before.

The business did not provide specific data on how many workers it permitted to work remotely before and after the epidemic or how that affected the demographic makeup of its staff.

Tesla did not respond to a request for comment.