Tesla has fired its entire 40-person “growth content” ad team as part of its recent massive round of layoffs. The ad team had been part of Tesla’s push to increase traditional advertising.
Since Tesla’s very beginning, the company has shied away from traditional advertising methods to sell its cars. Tesla still had marketing spend – events and so on – but just didn’t spend money to put paid advertisements on TV, on the internet, billboards, etc.
Instead, it focused on other methods to get its brand in front of people – for example, an early unique push to open Tesla stores in malls, rather than using traditional dealerships. Or its referral program, which turned owners into paid word-of-mouth advocates (incidentally, Tesla is shutting that down on April 30, but says it will bring it back in another form later). Or… blasting a Roadster into space.
But for a long time, there has been a push among advocates for Tesla to start advertising in mass media, as one of the few companies that is big enough and has enough money and interest to really make a full-throated case for EVs (as opposed to other companies, many of which focus on greenwashing or disinformation).
Finally, last year, a shareholder brought up the question of advertising at Tesla’s annual shareholder meeting, and CEO Elon Musk, who “hates advertising,” said “we’ll try a little advertising and see how it goes.“
Since then, Tesla started running ads in various media. This included video ads on YouTube, Facebook and, controversially, putting ads on Twitter after Tesla CEO Elon Musk wasted tens of billions of dollars (and tons of his own time) on it. We recently reported that Tesla has spent at least $200,000 on ads on Twitter.
But those ads apparently did not turn out to Musk’s liking, as today Bloomberg reported that Tesla has cut its entire 40-person “global growth content” ad team. Musk confirmed the layoffs on twitter in a reply to the Bloomberg article, saying that the ads, one of which highlighted the ability to turn your lock sound into a fart, were “too generic”:
The team was led by Alex Ingram, who had worked in marketing for Tesla since 2020. But the new “growth content” team only started in December, and Ingram was actively recruiting to grow it in the last few months. Another director, Jorge Milburn, who had been with Tesla for 9 years and built the company’s presence in Iberia before moving into a growth position in the Netherlands, was laid off as well.
The team’s “maiden voyage” was only last month, with a 30-minute livestream going over the details of the new Model 3 “Highland” refresh. That livestream was promoted by Musk seen by 4.2 million people according to twitter’s, uh, generous view count methodology.
The firings come as part of a volatile time for the company, which in the week since it laid off 10% of its staff (including two key executives) has also ended its referral program (perhaps temporarily), lowered the price of FSD software and of most of its cars, put its $25k car on the backburner, recalled its new Cybertruck, all while filing to ask for a $55billion payout for its CEO and to move the company’s incorporation to Texas.
All of this news comes in a month where Tesla announced bad quarterly delivery results, with a rare year-over-year drop in deliveries. The company will release its quarterly results tomorrow afternoon (and perhaps also unveil its Model 3 Ludicrous performance car).
Electrek’s Take
I’ve never particularly thought that Tesla did need to push into advertising. While ads are effective and marketing is necessary for any business, Tesla has never had any trouble selling cars before, with nearly every quarter in the company’s history resulting in higher sales than the year prior. For a long time, Tesla has been supply-constrained, not demand-constrained, so it didn’t really matter if it advertised or not.
However, last quarter specifically, Tesla was very much not supply-constrained. Inventory grew a lot last quarter, as Tesla produced many more cars than it sold.
This is precisely the time when a company could use a little advertising or marketing to manage the way its getting its name out in front of the public.
This is especially true when the company’s other primary marketing outlet is an outspoken CEO who has recently dedicated his time more towards boosting anti-semitic conspiracy theories than to boosting Tesla. This has turned off Tesla’s core demographics, which is having a significant effect on people’s desire to buy the company’s cars.
One might say that Tesla’s poor performance over the last quarter is an example of why this team was cut, since their methods were clearly not effective given Tesla’s sales results. But the team hadn’t even had time to get off the ground yet, so it seems premature to axe it this early on.
There’s a lot of ways that traditional advertising is boring, and that utilizing new methods to their maximum extent can help companies reach new customers in more interesting and efficient ways. Tesla has done a good job of the latter, so far.
But I think firing a whole team that’s meant to explore those methods, while also relying on your company’s part-time CEO (who’s seemingly more interested in getting in dumb fights and responding to racist/sexist/everything-else-ist memes on twitter) to do the bulk of Tesla’s outreach, is probably not the best way to get out of a sales slump.