Elon Musk Is Doing His Best Jack Welch Impression
Word leaked on Friday that Tesla (NASDAQ: TSLA) had fired 400 to 700 workers across the organization as part of its "annual performance review." That's a nice way of saying Tesla annually cleans house and dumps what it views as the weakest-performing workers, eventually replacing them with new staff.
The practice isn't unheard of. In the 1980s, Jack Welch at General Electric (NYSE: GE) made firing what he viewed as the bottom 10% of the workforce a part of the business every year. It was known as the "vitality curve" in GE, and it was a staple at the company for three decades. I's now been abandoned, and even annual reviews are in the rearview mirror. But Elon Musk thinks firing people every year is still a pillar to building an efficient business.
Image source: Tesla.
Source: Fool.com