Tesla Ends Contractor Agreement at Giga Texas, 82 Workers Laid Off
Tesla has unexpectedly ended its contract with MPW Industrial Services Inc. at Gigafactory Texas, leading to the layoff of 82 workers who supported operations at the Austin facility.
According to a #WARN notice filed with the #Texas Workforce Commission on August 27, 2025, the terminations will take effect September 1. The cuts affect 61 technicians, 7 team leads, 7 supervisors, and 7 managers. The workers are not union-represented and have no bumping rights.
MPW, an Ohio-based industrial services provider, specializes in cleaning and facility management. The layoffs are directly tied to the sudden termination of Tesla’s contract.
This comes against the backdrop of Tesla’s broader #workforce reductions. In April 2024, the company laid off over 2,000 employees in Austin. Since then, Tesla’s sales have declined, and while a temporary Q3 boost is expected due to expiring tax credits, analysts forecast further sales drops in late 2025 and early 2026.
Industry watchers suggest this #contractors cut could be a precursor to more layoffs, with Tesla historically starting with outside partners before reducing internal headcount. Some speculate the move is tied to cost-cutting and production slowdowns to avoid oversupply.
Electrek’s analysis warns that Tesla may be on the verge of another wave of staff reductions in the US, particularly as EV demand softens. While other factors could explain the contract termination, the timing aligns with the company’s need to adjust ahead of a potential downturn.