Coronavirus Outbreak: Tesla Planning Pay Cuts And Furloughs In Wake Of COVID-19 Shutdown
FREMONT (CBS SF) -- An email has revealed plans by Fremont-based Tesla to impose paycuts and furloughs starting next week as the automaker struggles with the current coronavirus shelter in place shutdown in California, according to a published report.
CNBC was reporting it has obtained an internal email that lays out the company's plans on how to weather the economic forced slowdown in production and sales triggered by the virus outbreak that has swept through the San Francisco Bay area, the state and the nation.
Tesla fought the shelter in place order when it was issued in March, declaring its workforce fell under the essential workers exemption. However, after several workers complained and Alameda County Sheriff's Department stepped in to enforce the ban, owner Elon Musk relented and shuttered the doors.
Just this week, Musk unveiled a design made of auto parts for much needed ventilators, but that production apparently was not enough to stem off the planned employment actions.
According to the email obtained by CNBC, on Monday U.S. employees who hold director and vice president-level roles and above will see pay reductions of 20% to 30% and "everyone else" will receive a pay cut of 10%. Those reductions will remain in place until at least June.
The email further stated that employees who can't work from home and haven't been assigned to critical work on site will be furloughed, and the majority of furloughed staff will receive unemployment benefits "roughly equivalent to take home pay" and retain their health benefits.
Neither the company nor Musk have not yet to make an official announcement of its plans or if those plans will include other divisions of the company including its Space X project.
Here is the full text of the email CNBC obtained sent out by the company's head of North American HR, Valerie Workman, on Tuesday evening:
Hi Everyone,
Thank you for your continued commitment to Tesla and our mission during this unprecedented time. We know that the uncertainty has not been easy, and we are doing everything we can to keep you safe and informed while also navigating the changes around the world.
While we are continuing to keep only minimum critical operations running, we expect to resume normal production at our U.S. facilities on May 4, barring any significant changes. Until that time, it is important we take action to ensure we remain on track to achieve our long-term plans.
Starting Monday, April 13, we are implementing the below actions as part of a broader effort to manage costs. This is a shared sacrifice across the company that will allow us to progress during these challenging times.
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.
A furlough notice will be emailed to you in the coming days with additional instructions on how to apply for unemployment benefits through your state agency
For the vast majority of furloughed employees, unemployment benefits will be roughly equivalent to normal take home pay.
Certain employees will be assigned to critical functions and they will continue to report onsite. Those employees will be communicated to directly by their manager or HR partner.
For the merit review cycle:
Salary and hourly rate adjustments will be put on hold.
Equity grants will be on hold as well.
If you would like to take a voluntary leave of absence, as some have reached out to request, please discuss with your manager and HR partner.
We continue to monitor the situation closely, and our top priority is to ensure the safety of our employees. As usual, for those who are onsite, if you are sick or are uncomfortable coming to work, please contact your manager and stay at home.
We respect your decision and you will not be penalized. For HR-related questions, contact your HR partner or email [address redacted]
Thank you all so very much for everything you do to ensure the success of our company.
Valerie Capers Workman | North America HR+