Tesla To Cut Pay, Furlough Workers As Covid-19 Shutdowns Continue

Tesla Inc. is planning to cut pays and furlough non-essential workers as the shut down of its vehicle production continues amid escalating coronavirus or Covid-19 cases.

As per multiple reports citing an e-mail sent to all employees by North American HR Valerie Capers, the luxury electric car maker is taking certain actions starting April 13, aiming to manage costs.

Tesla noted that there will be temporary pay cut for salaried employees until the end of the second quarter. For U.S. employees, there will be a 30 percent cut in salary for Vice Presidents and above, 20 percent for Directors and above, and 10 percent for everyone else.

For non-U.S. employees, there will be comparable reductions. The specifics of the planned pay cut will be informed by the local leadership team in accordance with local laws and works-councils.

Further, Tesla said it is now keeping minimum critical operations running, and expects to resume normal production at U.S. facilities on May 4. Until then, employees who cannot work at home and have not been assigned to critical work onsite will be furloughed.

Under furlough, they will remain Tesla employee without pay and will retain healthcare benefits. Tesla said these employees will not report to work until the furlough ends and are directed to return by management, which is expected to be May 4.

Tesla also asked these affected employees to apply for unemployment benefits through their respective state agency. For majority, these unemployment benefits are expected to be roughly equivalent to their normal take home pay.

Further, Tesla will assign certain employees to critical functions and they will continue to report onsite.

Tesla in mid-March had announced its plans to temporarily suspend operations at its California and New York factories following health orders that were implemented to stop the spread of COVID-19.

Meanwhile, the company reportedly is producing ventilators at its Gigafactory in Buffalo, New York to support the city’s hospitals amid the coronavirus pandemic. At the Gigafactory in Nevada, the company was planning to scale back the workforce by more than 75 percent.

Tesla in early April had reported higher deliveries of about 88,400 vehicles in the first-quarter of 2020, compared to 63,000 vehicles last year. The company produced almost 103,000 vehicles in the quarter, compared to 77,100 vehicles last year.

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