What’s The Deal?Hardly a month after when Elon Musk's infrastructure and tunnel construction company firm, Boring Company had unveiled its first tunnel in California, USA, announced laying off its five employees yesterday. Click To Tweet
What Does This Mean?
As reported by Recode, on Friday, the company terminated five employees, at least some of whom helped with the construction of that first underground passageway.
A spokesman said that the employees were dismissed for performance reasons as part of regular performance reviews.
“The Boring Company is hiring for over a dozen roles, pursuing a number of projects across the country, and planning to grow significantly in 2019,” Musk quoted, clearly making the distinction that this decision should not be confused with cost-cutting efforts.
The dismissals were announced the same day when Tesla, another Musk company, slashed its workforce by 7% as a cost-cutting measure.
A week earlier, SpaceX, the rocket company, owned by Elon Musk cutback about 10% of its employees ‘due to the extraordinarily difficult challenges ahead.’
Why Does It Matter?
The Bigger Market Picture: The elephant in the room is – Tesla got $1 billion in debt which is due March 1st. What’s alarming is that the structure of the debt deal could seriously hurt the company’s cash balance.
The Boring Company was founded by Musk in 2016 and till date, the company has raised more than $100 million in funding. It also employs moreover 80 workers to design and construct the underground tunnels that Musk hopes will create new transportation networks in congestion cities and help alleviate the aboveground traffic.
According to Fast Company, in mid-December 2018, Musk had unveiled the test tunnel for his envisioned zero-emission, high-speed transit system – including a surface-to-tunnel car elevator and a Tesla modified to run along the tunnel track outside SpaceX’s California headquarters.
In Chicago, the company is slated to build is a project dubbed Loop which the“high-speed underground train which is expected to reach the speeds in up to 150 miles per hour. It would rely on ‘autonomous electric skates’, analogous to train carriages transporting 8 to 16 passengers for each.”
To implement this system, the company will have to dig the tunnels and set up the infrastructure to move the ‘autonomous electric skates’ inside the tunnels.
As of now, the company has canceled its plan to build a second tunnel in Los Angeles after a lawsuit was filed against it. However, it plans to scout for another location and LA and also move ahead with its existing project plans in Chicago and Washington, DC.
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