Tesla Cuts Staff Wages, Furloughs Workforce

Tesla's Model 3 sedan. Image credit: Tesla

All non-essential workers at Tesla have been placed on furlough, and wages cut, amid the production shutdown due to pandemic

Tesla has made some tough decisions for its workforce amid the global Coronavirus pandemic.

Last month Tesla implemented a three week lockdown for its main factory in California. Chief executive Elon Musk had reportedly said he had hoped to continue manufacturing and delivering cars as normal, but this proved not to be possible amid the Californian state-wide lock-down.

The firm has also shut down factories in New York that are making solar roof tiles.

Elon Musk at Tesla’s Autonomy Investor Day, April 2019. Image credit: Tesla

Salary cuts

Now according to Reuters, Tesla told employees on Tuesday it would furlough all non-essential workers and implement salary cuts.

The electric car maker reportedly said it planned to resume normal operations on 4 May, barring any significant changes, according to an email sent to US staff by in-house counsel Valerie Capers Workman, which was seen by Reuters.

Tesla argued that these decisions were part of a broader effort to manage costs and achieve long-term plans.

Tesla did not immediately respond to a Reuters request for comment.

It is reported that the salaries for Tesla workers will be reduced beginning on 13 April, with the cuts remaining in place until the end of the second quarter (30 June).

Reuters said that in the United States, workers’ pay will be cut by 10 percent, directors’ salaries by 20 percent and vice presidents’ salaries by 30 percent.

It said that comparable reductions will be implemented outside of the United States.

Tesla has reportedly said that staff who cannot work from home and have not been assigned to critical work onsite factories will be furloughed (forced temporary leave).

That said, staff will maintain their healthcare benefits (important for people in the US) until production resumes, the email said.

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