Elon Musk email to Tesla employees tries to explain store closures
After Tesla’s sudden about-face on plans to close stores and go all-in with online car sales, Elon Musk emailed employees to explain the situation. Electrek obtained copies of the message and Business Insider reported on its contents, which still didn’t provide much in the way of exact information about potential closings and layoffs. In the message, Musk told employees:
– Stores with a high visitation rate and that lead to significant sales will absolutely not be closed down. It would not make any sense to do so, except in rare cases where the rent is absurdly high. Moreover, Tesla will continue to open stores throughout the world that meet the above criteria.
– Stores that are in a location with low visitation rates (ie empty most of their opening hours) and lead to low sales will gradually be closed down. This is analogous to seeds on barren ground. There is no reasonable way to justify keeping such stores open.
– Stores that are somewhere in the middle will be evaluated over time to see there is some way to allow them to cover their costs. If there is, they will remain open, otherwise not. However, these stores will be given a fair opportunity to prove their case.
The above principles also apply to the sales team. No one who is a major contributor to demand generation will be let go. That would make no sense. However, sometimes, in a company with 45,000 people, things happen that make no sense.
It’s apparently meant to reassure high-performing sales people and those at well-performing locations, but without concrete metrics they may still feel unsettled. For now, Tesla has higher prices and a number of retail locations remain open, but any spots that aren’t doing consistent business are potentially on the chopping block as it emphasizes more efficient online sales processes.