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Tesla Decides to Cut Salaries, Furlough Staff Due to COVID-19

Tesla told staff Tuesday it would furlough all non-essential employees and implement salary cuts during a shut down of its U.S. production plants due to the coronavirus outbreak.

Tesla Decides to Cut Salaries, Furlough Staff Due to COVID-19

Tesla mentioned it planned to resume normal operations on May 4, barring any vital changes, in line with an email, sent to U.S. workers by in-house counsel Valerie Capers Workman.

The company, which called off production at its San Francisco Bay Area vehicle and New York solar roof tile plants on March 24, stated in the email the decisions had been part of a broader effort to manage costs and obtain long-term plans.

Coronavirus has slashed U.S. demand for vehicles and forced a number of other auto manufacturers to furloughed U.S. workers.

Pay for salaried Tesla staff might be reduced starting on April 13, and cuts will remain in place until the top of the second quarter, the e-mail stated.

In the U.S., employees’ pay will be cut by 10%, administrators’ salaries by 20%, and VP’s salaries by 30%. Comparable reductions can be applied abroad.

Employees who cannot work from home and haven’t been assigned to critical work onsite factories will be furloughed, with staff maintaining their healthcare benefits until manufacturing resumes, the email stated.

Tesla suspended manufacturing at both plants in March after it ended a standoff with authorities concerned about the spread of COVID-19.

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