Tesla Faces Layoffs and Salary Cuts Amid COVID-19 Pandemic

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Kwon Jae-hee] American electric vehicle company Tesla plans to cut salaries for all employees and lay off part-time workers. This is because the factory operations were temporarily halted due to the spread of the novel coronavirus infection (COVID-19), and Tesla, like others, is facing an urgent need to secure cash amid the economic downturn caused by COVID-19.

According to a report by CNBC on the 7th (local time) citing an internal Tesla email, Tesla plans to lay off part-time workers by May 4, when production is scheduled to resume. Additionally, salaries for all employees will be cut. The salary cuts are expected to be implemented until the end of the second quarter.

According to an internal email sent on the evening of the 7th by Valerie Workman, head of Tesla's North America HR team, "Currently, only minimal essential operations are running, and normal production at the U.S. factory is expected to resume on May 4," adding, "Starting April 13, we will implement extensive cost management efforts."

She continued, "For employees in the U.S., salaries will be reduced by 30% for vice presidents and above, 20% for directors and above, and 10% for all other employees," adding, "A similar level will apply to employees outside the U.S." However, Tesla announced that medical benefits will be maintained even during leave.

Meanwhile, Tesla had previously announced that it would not renew contracts for all contract workers due to the temporary factory shutdown caused by the COVID-19 situation.