Tesla will cut pay for all of its employees and will furlough all hourly workers until May 4, when it intends to resume production of electric cars, according to an internal e-mail that multiple employees shared with CNBC. The pay reductions are expected to be in place until the end of the second quarter.
Health orders implemented to curb the spread of COVID-19 have forced the electric vehicle maker to wind down new vehicle production at its main car plant in Fremont, California.
The cuts follow Tesla's first-quarter vehicle production and deliveries report, which pleased investors — the company delivered approximately 88,400 vehicles and produced 103,000 in Q1. The company has yet to withdraw guidance it gave investors for 2020, saying it should "comfortably exceed" 500,000 vehicle deliveries for the year.
Last week, Tesla informed staffing agencies that it would be ceasing all contract work until further notice. Hundreds of temps were dismissed from their Tesla gigs as a result.
Pay will be temporarily reduced for salaried employees.
For U.S. employees, these reductions are 30% for Vice Presidents and above, 20% for Directors and above, and 10% for everyone else.
For non-U.S. employees, there will also be comparable reductions, of which the specifics will be communicated by the local leadership team in accordance with local laws and works-councils.
These reductions are expected to be in place until the end of Q2
Employees who cannot work at home and have not been assigned to critical work onsite will be furloughed.
Under furlough, you remain an employee of Tesla (without pay) and retain your healthcare benefits. You will not report to work until the furlough ends and you are directed to return by management, which we expect to be May 4.
Tesla will cut pay for all of its salaried employees until the second quarter of 2020, and furlough hourly workers until May 4, when it intends to resume production of electric cars, according to an internal e-mail that employees shared with CNBC.