AM I NEXT? NO LOVE AT TESLA MOTORS

MARCH 25, 2001 — COMPETITION INCREASES

Financial analysts covering Tesla are noting that Ford’s Mustang MACH-3 and entries from Volkswagen and General Motors, companies with significant manufacturing expertise and deep pockets.  

Tesla’s advantage lies in its “cool” factor and a large number of charger locations. Tesla touts itself as a technology company that happens to make cars. Look for major improvements in production and pricing with local manufacturing in Europe and Asia.

 MAY 15, 2008 — Original post…

It appears that Elon Musk’s bubble at Tesla may be closer to popping as the CEO announced that the company is undertaking a restructuring of its management structure. Or according to Musk, “flattening the management structure.”

What else could he possibly tell investors when a number of high-ranking members of the management team have left – and one, the head of engineering, claims to be on sabbatical at a time when the automaker is struggling to meet its own projections and ramp-up Model 3 production. 

 “To ensure that Tesla is well prepared for the future, we have been undertaking a thorough reorganization of our company. As part of the reorg, we are flattening the management structure to improve communication, combining functions where sensible and trimming activities that are not vital to the success of our mission.

To be clear, we will continue to hire rapidly in critical hourly and salaried positions to support the Model 3 production ramp and future product development.”

The purpose of a legitimate effort in flattening layers of management is to eliminate superfluous, redundant, and costly layers of managers and supervisors between the management team and the employees who actually work for a living. Considering Musk lives at the plant and is said to sleep on the production floor, one wonders how anything can speed up decision-making and problem-solving.  

Considering Musk is also heavily involved in the other activities involving SpaceX, The Boring Company, SolarCity, and various Chinese ventures, one wonders how much more time, effort, and energy Musk can expend before crashing. 

Change is coming. There will always be a tomorrow, no matter how much you may try to ignore it. There are no guarantees in life or promises for a bright future. Just because something bad hasn't happened yet, doesn't mean it won't. It can happen to anyone, anytime, anywhere. No one is guaranteed to wake up tomorrow and still have a job by evening. Are you now wondering, Am I Next?

eBAY TRANSITIONING AWAY FROM PayPal

INTERMEDIATION

eBay, the iconic auction marketplace that connects consumers to merchants, has announced that they will “intermediate” payments on its marketplace platform by selecting Netherlands-based Adyen to become its primary payments processor and reducing the use of the iconic payments processor PayPal. PayPal, once owned by eBay and a long-time eBay partner, will continue to be another payments option available to buyers.  

Anyone, myself included, who has purchased merchandise through eBay and paid through PayPal has noticed that the purchaser must have a PayPal account linked to their bank, debit-card, or credit card and that you are redirected from eBay’s site to PayPal’s site to authorize payment and then re-directed back to eBay to complete the transaction. 

Clearly, eBay has used the wrong word. We often hear about disintermediation, the reduction in the use of intermediaries between producers and consumers, but to intermediate would be to insert an intermediary into the process. I believe the correct terms should be “integration” as the function is already supplied by an intermediary, but will tightly bound systemically and managed by eBay to offer the customer a seamless shopping experience.

For merchants, you must have a PayPal account and be subject to their almost dictatorial powers, sometimes losing your hard-earned money in a pre-sale process and other glitches.

“The two issues that are most commonly voiced by actual merchants are complaints of sudden account freezes that disable the merchant’s ability to accept further transactions and withdraw money, and poor experiences with customer service. Merchants who complain of experiencing holds often report difficulty in getting explanations of why the hold was established.”  <Source> 

The spin …

"As a leading global commerce company, eBay believes that payments intermediation is strategically important to improve the buyer and seller experience on its platform and will enable the company to further innovate on behalf of its customers. In a rapidly changing and competitive e-commerce landscape, shoppers expect to be able to both shop and checkout on the site on which they transact.  As eBay intermediates payments, shoppers will be able to complete their purchases within eBay." 

According to eBay Chief Executive Devin Wenig,"We believe that we can offer a more seamless experience while giving buyers and sellers more choice for payment and payout options."

The timing …

"eBay will begin payments intermediation on the Marketplace platform on a small scale in North America starting in the second half of 2018, expanding in 2019 under the terms of the Operating Agreement with PayPal. In 2021, eBay expects to have transitioned a majority of its Marketplace customers to its new payments experience."

What is not mentioned …

As they say, the devil is in the details, in this case, those unilateral take-it-or-leave-it “terms of use” agreements that often convey significant legal and financial protections to the company at the expense of the user.  By taking control over the payment process and the merchant payment system, eBay exerts more control over merchants. Control which allows them to unilaterally and profitably withhold funds as collateral against future returns, increase processing charges, settle disputes in favor of the customer over the objections of the merchant, and possibly preventing class action lawsuits by mandating arbitration as the primary method of dispute resolution. 

While this means little or nothing to the consumer, employees of eBay who support PayPal integration and employees of PayPal might be caught up in environmental changes. For merchants, this means transitioning to what is little more than a start-up backed with significant venture capital and ceding control to yet another company.
 

NO LOVE AT AUTODESK (02/03/23)

FEBRUARY 3, 2023 — 250 JOB CUTS

The company has announced targeting 250 employees, approximately under 2% of its global workforce.

According to a company spokesperson, “the layoffs are part of Autodesk’s plans for its 2024 fiscal year, which began this week. As part of those plans, we’re focused on ensuring that our resources remain well-aligned to support our key priorities for the coming year. As part of this process, we made the difficult decision to eliminate these roles, comprising less than 2 percent of Autodesk’s total global workforce.

“Autodesk is dedicated to supporting impacted employees with severance, assistance in finding alternative jobs inside of Autodesk, and providing career services that will connect them to the resources, information, and people they need to pursue new career opportunities.”

NOVEMBER 30, 2017 — Original post...

Autodesk, the software company that pioneered the automation of architectural and engineering drafting with their CAD/CAM (Computer-Aided Design/Computer-Aided Manufacturing) software, has announced that the California-based company is laying off approximately 1,200 employees in a planned restructuring.

Like most software companies, they are reorganizing the company as they transition from desktop-based perpetually-licensed software to cloud-based subscription models.

Of course, shifting to a cloud-based system impacts revenues as up-front larger payments are transitioned to lower initial subscription costs and the spread-out of licensing revenues which replace annual maintenance agreements. So it should come as no surprise to see a reduction in force to maintain margins, earnings-per-share, and to reduce the run rate.

The company’s announcement, written in corporate-speak, is fairly normal for this type of restructuring.

“Autodesk today announced a restructuring plan to focus on the company's strategic priorities of completing the subscription transition; digitizing the company; and re-imagining manufacturing, construction, and production. Through the restructuring, Autodesk seeks to streamline the organization and re-balance resources to better align with the company’s priorities. By realigning its investments, Autodesk is positioning itself to meet its long-term goals, including keeping non-GAAP spend flat in fiscal 2019.”

“Autodesk plans to reduce staffing levels in the near term by approximately 13%, or approximately 1,150 positions, and to consolidate certain leased facilities.  The company anticipates taking a pre-tax restructuring charge in the range of $135 million to $149 million. Approximately $91 million to $100 million in pre-tax charges will be taken in the fourth quarter of fiscal 2018. The remaining charge will be taken in fiscal 2019.”

“Autodesk is undergoing a business model transition in which it has discontinued most new perpetual license sales in favor of subscriptions and flexible license arrangements. As part of this transition, Autodesk discontinued new maintenance agreement sales for most individual products at the end of the fourth quarter of fiscal 2016 and for suites at the end of the second quarter of fiscal 2017. During the transition, revenue, margins, EPS, deferred revenue, and cash flow from operations will be impacted as more revenue is recognized pro-ratably rather than upfront and as new product offerings generally have a lower initial purchase price. The company has introduced new metrics to help investors understand its financial performance during and after the transition, as shown below.”

This should serve as a red-flag warning to companies that depend heavily on the declining desktop model. 

For individuals looking to purchase used ‘industrial-strength” computers, bargains in refurbished models abound. It is often cheaper to purchase a used computer than replace a failing disk. I never thought I would see industrial-strength networked printers priced lower than their respective toner cartridges. 

Change is coming. There will always be a tomorrow, no matter how much you may try to ignore it. There are no guarantees in life or promises for a bright future. We see good people being laid off through no fault of their own. Just because something bad hasn't happened yet, doesn't mean it won't. It can happen to anyone, anytime, anywhere. No one is guaranteed to wake up tomorrow and still have a job by evening. Are you now wondering, Am I Next?