Tesla is cutting nearly 200 employees from its office in San Mateo, California as part of continued cuts by the electric car giants that will see the location close altogether.

The news comes after the company’s chief executive officer, Elon Musk, previously warned about the job cuts because he had a “super bad feeling” about the economy.

The company told at least 195 of the location’s 276 staffers at the office were told their position had been eliminated, while those that remain were told they will be relocated.

The San Mateo offices were heavily involved with the Tesla Autopilot driver-assistance system. Staff were informed of the decision Tuesday.

Here’s what Carnegie Mellon University engineering professor Raj Rajkumar explained to Reuters:

“Tesla clearly is in a major cost-cutting mode,” adding that “raw material costs and supply chain problems” are troubling the company.

Earlier this month, Musk said in an interview that Tesla’s factories have become “gigantic money furnaces” thanks to the supply chain issues.

“Just been trying to keep the factories operating the last couple years has been a very difficult thing, like supply chain interruptions have been severe, like extremely severe. The past two years have been an absolute nightmare of supply chain disruptions, one thing after another, and we are not out of it yet.”

Daily Wire dropped some details:

In another bout of layoffs, two employees who volunteered in LGBTQ and diversity roles lost their jobs. Both had received multiple promotions in their relatively short tenures, seemingly indicating that their performance was not a cause for concern and that the layoffs could be related to Musk’s campaign against the “woke mind virus.”

Last week, former Tesla employees sued the automaker for allegedly violating federal law through its execution of widespread dismissals. According to the class action complaint from John Lynch and Daxton Hartsfield — who worked at Tesla’s Gigafactory 2 plant in Sparks, Nevada — the company violated the Worker Adjustment and Retraining Notification (WARN) Act by failing to provide 60 days of advance written notice regarding the mass layoff.

“Plaintiffs and all similarly situated employees have been damaged by Tesla’s conduct constituting violations of the WARN Act,” the lawsuit argues, “and are entitled to damages for their back pay and associated benefits for each day of the violation because Tesla has not acted in good faith nor with reasonable grounds to believe their acts and omissions were not a violation of the WARN Act.”

Last year, Musk revealed that Tesla would be moving its headquarters from the Democrat-run state to a new facility near Austin, Texas.

Here’s what Musk said at the launch of the new facility:

“It’s tough for people to afford houses, and people have to come in from far away. There’s a limit to how big you can scale in the Bay Area. In Austin, our factory is like five minutes from the airport, 15 minutes from Downtown.”

Many major companies have been moving their business out of California. And the closure of the San Mateo facility reflects Tesla’s broader transition out of this Democrat-run state.

Sources: DailyWire, The Wall Street Journal, Reuters

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