Tesla told employees Tuesday it is shutting down its San Mateo, California, office and cutting 200 jobs there as part of the electric vehicle manufacturer’s efforts to reduce its workforce to save money.

The staff at the San Mateo office had contributed to the improvement of Tesla’s advanced driver-assistance system, or Autopilot. According to people familiar with the matter, more than half of the staffers at that office were notified that their jobs were being eliminated. The remaining employees will be relocated to another office, according to the Wall Street Journal.

A Tesla charging station in a Tesla showroom features the manufacturer’s logo. (Christophe Gateau/picture alliance via Getty Images / Getty Images)

Bloomberg earlier reported on Tesla’s plan to close the facility. Most of the eliminated jobs were held by hourly workers despite CEO Elon Musk saying in an interview last week that he plans to add hourly workers but cut 10% of salaried staff. 

The move comes after Musk warned he had a “super bad feeling” about the economy. Reuters reported that Musk told his executives to “pause all hiring worldwide.” Musk’s directive comes amid growing concerns about a possible recession.

Tesla car
A Tesla vehicle drives past a Tesla’s factory. (REUTERS/Stephen Lam / Reuters Photos)

Musk recently said that Tesla’s new factories in Texas and Germany were losing “billions of dollars,” in part, because of supply chain issues impacting the company’s ability to increase production at each facility.

“Both Berlin and Austin factories are gigantic money furnaces right now,” Musk said at the time. “It should be like a giant roaring sound which is the sound of money on fire.”

Elon Musk at the Metropolitan Museum of Art
Elon Musk attends The Metropolitan Museum of Art’s Costume Institute benefit gala celebrating the opening of the “In America: An Anthology of Fashion” exhibition on May 2 in New York. (Evan Agostini/Invision/AP / AP Newsroom)

Supply chain breakdowns since the onset of COVID-19 two years ago have been especially debilitating for automakers, who get parts from all corners of the globe. A lack of computer chips needed to run cars’ computers compounded automakers’ problems and sent prices for used and new cars skyrocketing.

Tesla recently raised prices broadly across its fleet of cars and the company’s shares have lost 38% of their value in less than three months.

According to SEC fillings, Tesla and its subsidiaries employed almost 100,000 people at the end of 2021.

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