Tesla To Furlough Workers, And Cut Down Compensations Due To Quarantine

09 April 2020

Tesla employees who are not currently working will get instructions on how to apply for unemployment benefits through their state agencies

After suspending its factories Tesla is forced to furlough employees who can’t work from home. The company notified staff of these measures with official emails, Reuters and Forbes report.

Apart from the furloughs, Tesla employees will face salary cuts. Vice-presidents’ compensation will be cut by 30%, directors’ pay by 20%, and workers’ — by 10%.

“This is a shared sacrifice across the company that will allow us to progress during these challenging times,” said Tesla’s Head of North American HR, Valerie Workman.

New measures will come into force on April 13th. They will affect around 10 thousand Americans as well as overseas workers. Tesla employees, who have been hit by furloughs, will get instructions on how to apply for unemployment benefits through their state agencies. 

The main Tesla factory in California will restart work by May 4th, if quarantine is over by then. However, Tesla’s staff will continue to get reduced salaries till the end of Q2 2020, says the email. 

The company had to suspend the work on its factories in California and New York on March 24th. These measures are first of their kind for Tesla. On April 2nd, the company announced it hit better than expected results: Tesla managed to deliver 88 thousand cars, it was 8 000 more than the company had planned. At the time, analytics were surprised by such an unpredictable success, and the company didn’t mention it was preparing new cuts.

Due to the decrease in car demand, auto manufacturers that own factories in the U.S. had to implement similar measures. BMW furloughed 11 000 workers, Nissan — 10 000, and Honda — 6 500. Ford is paying its staff 75% of its actual salaries. 

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