Tesla to furlough workers, cut employee salaries due to coronavirus
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THURSDAY, FEBRUARY 09, 2023
Tesla to furlough workers, cut employee salaries due to coronavirus

Global Economy

Reuters
08 April, 2020, 04:55 pm
Last modified: 08 April, 2020, 05:00 pm

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Tesla to furlough workers, cut employee salaries due to coronavirus

The coronavirus pandemic has slashed US demand for cars and forced several other automakers to furlough US workers

Reuters
08 April, 2020, 04:55 pm
Last modified: 08 April, 2020, 05:00 pm
FILE PHOTO: The view of Tesla Inc's US vehicle factory which was open for business on March 18, despite an order by the Alameda county's sheriff's office to comply with a three-week lockdown in the San Francisco Bay Area, in order to rein in the spread of coronavirus disease (COVID), in Fremont, California, US, March 18, 2020. REUTERS/Shannon Stapleton/File Photo
FILE PHOTO: The view of Tesla Inc's US vehicle factory which was open for business on March 18, despite an order by the Alameda county's sheriff's office to comply with a three-week lockdown in the San Francisco Bay Area, in order to rein in the spread of coronavirus disease (COVID), in Fremont, California, US, March 18, 2020. REUTERS/Shannon Stapleton/File Photo

Tesla Inc told employees on Tuesday it would furlough all non-essential workers and implement salary cuts during a shut down of its US production facilities because of the coronavirus outbreak.

Tesla said it planned to resume normal operations on May 4, barring any significant changes, according to an email sent to US employees by in-house counsel Valerie Capers Workman, which was viewed by Reuters.

The company, which suspended production at its San Francisco Bay Area vehicle and New York solar roof tile factories on March 24, said in the email the decisions were part of a broader effort to manage costs and achieve long-term plans.

Tesla did not immediately respond to a request for comment.

The coronavirus pandemic has slashed US demand for cars and forced several other automakers to furlough US workers.

Pay for salaried Tesla employees will be reduced beginning on April 13 and cuts will remain in place until the end of the second quarter, the email said.

In the United States, workers' pay will be cut by 10 percent, directors' salaries by 20 percent and vice presidents' salaries by 30 percent. Comparable reductions will be implemented abroad.

Employees who cannot work from home and have not been assigned to critical work onsite factories will be furloughed, with workers maintaining their healthcare benefits until production resumes, the email said.

Tesla suspended production at both factories last month after it ended a standoff with authorities concerned about the spread of the coronavirus.

Tesla's sole US auto factory employs more than 10,000 workers, with annualized production of slightly more than 415,000 units by the end of December 2019.

A view of Tesla Inc's US vehicle factory in Fremont, California, US, March 18, 2020. REUTERS/Shannon Stapleton

The suspension interrupts a planned ramp-up in production of its Model Y sport utility vehicle at the factory. Demand for the Model Y is expected to be higher than for all of Tesla's other models combined, Chief Executive Elon Musk has said in the past. The Model Y taps into strong demand for SUVs and is much less expensive than the high-end Model X.

Tesla on March 20 said it believed it had enough liquidity to successfully navigate the extended period of uncertainty, with some $6.3 billion in cash at the end of the third quarter, ahead of a recent $2.3 billion capital raise.

The company on Thursday surprised investors with strong first quarter delivery numbers despite the coronavirus outbreak hammering nationwide car sales and said Model Y production was ahead of schedule.

Tesla

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