Tips for Employers Rethinking Internship Offers

Tesla’s decision to rescind its internships just weeks before students were to begin them gives employers insight into what to do—and not do—when weighing whether to walk back such offers.

It’s important to consider the effect on current and future employees as well as the potential for harm to the company’s brand.

Employers that withdraw internships late in the process “will end up paying with their reputation, trust, and potentially respect in the market,” said Annie Rosencrans, director of people and culture at HiBob, an HR tech platform with U.S. headquarters in New York City.

“Gen Z has lost trust in companies, and it’s clear why,” she said. “They came of age in the workplace in the height of the pandemic, when companies were announcing layoffs, going on hiring sprees, and then laying off staff again.

“On top of that, companies have flip-flopped on flexible work policies, making this generation of workers feel as though many businesses do not care about their employees or their mental health, and companies that are transparent and culture-focused will be more attractive to this generation of workers.”

Rosencrans pointed to a HiBob survey conducted with 1,000 U.S. tech workers ages 20 to 30 that found 28 percent would leave their current job if they were worried it would be eliminated soon. Seeing a company rescind offers “will leave a bad taste in their mouths.”

Additionally, it “sets off alarm bells for investors and also for employees and job seekers,” she cautioned.

Tesla announced in April it would be laying off more than 10,000 members of its global workforce, Forbes reported, and in May rescinded its internships one day after it fired about 500 people—the Supercharger team that creates vehicle chargers. The company initiated another wave of layoffs in May, and Business Insider reported the company whittled down its North American job postings from 3,400 to three.

The short notice to interns may give the impression the company doesn’t care about its people and breaks the trust “not only [of] interns but employees and prospective, future employees,” said Jennifer Dulski, CEO and founder of Rising Team, a San Francisco-based platform that helps managers run team-building sessions.

It affects the teams counting on interns to provide additional output and removes management-training opportunities that overseeing an intern or intern class can provide someone readying for a management role.

Existing employees may well wonder if their job is next on the chopping block and leave before that happens—especially your best employees who will have lots of options, Dulski said.

For organizations faced with rescinding internship offers, here are some things to keep in mind:

Consider Other Options

No number has been given on the number of interns affected, but Tesla annually hires more than 3,000 students globally for internships and apprenticeships, according to the company’s 2022 Impact Report.

Withdrawing its internships appears to be a cost-cutting measure. In such cases, there might be other approaches companies could take without axing internships entirely and leaving students “in the lurch,” Dulski said; however, “it does take more time and effort to do that.”

Options might include:

• Shortening the length of the internship.
• Having students share the internship rather than having one intern per role for the entire summer.
• Offering internships at a lower salary level that is still above minimum wage.

If there’s no way to creatively save the internship, Dulski suggested compiling a list of the students the company had vetted and recruited and sharing it with organizations still seeking interns.

The earlier you can notify students, the better. Internships often are only available during a set time frame, so give students at least 10 weeks’ notice prior to their start date, Rosencrans suggested, so they have time to find a new position.

Also, use foresight, Dulski advised. If there is a chance that the employer may need to pull back internships, it would be better not to make the offers in the first place.

Delivering the Bad News

Be both direct and empathetic, Rosencrans advised HR professionals who have to be the bearer of the bad news.

“Explain to a student that [the decision] is unrelated to them, it’s a business decision, and that you understand it puts them in an incredibly difficult position. Whenever possible, try to set time with each person to talk either in person or via Zoom video,” she added. “It shows you care and are giving them the time they deserve.

“Afterwards, follow up with a letter that confirms the offer has been rescinded, and if you can, offer them resources or connections to find another opportunity.”

Tesla employee Diana Rosenberg, technical lead for environmental management and battery supply, did just that.

She reached out to her LinkedIn network to promote a graduate student who had turned down “several appealing offers” to accept the now-revoked Tesla internship.

“Please make our loss your gain!” Rosenberg urged in her post that praised the student’s “excellent capabilities” and various areas of expertise.

In fact, General Motors is interested in the students whose internships at Telsa were rescinded, Business Insider reported, noting that GM also has a history of hiring former Tesla employees.

Be transparent about the reasoning behind the decision, Dulski said. If it was done to save full-time jobs, for example, “that might earn back more trust.”

In a note to staff about the layoffs, Tesla CEO Elon Musk explained that the move was to “enable us to be lean, innovative and hungry for the next growth phase cycle,” CBS News reported.

As for students who find their internships rescinded weeks before their start date, Rosencrans advised consulting with career services at their schools.

“Many colleges will have strong alumni networks and can place students with organizations that are accepting interns,” she said. It’s a good idea, too, to leverage their networks on social channels and post on LinkedIn about their availability.