Tesla will cut the pay of some workers by as much as 30% and furlough other workers, according to an internal company memo seen by Bloomberg. The moves are being made in an attempt at saving costs while some of Tesla’s factories are shut down due to the COVID-19 pandemic.
“This is a shared sacrifice across the company that will allow us to progress during these challenging times,” the memo states. Under the plans:
- Workers at the level of vice presidents or above will see the steepest cuts, amounting to 30% of their current salaries.
- Directors will see 20% cuts.
- All other Tesla workers will see 10% cuts.
- In addition to the wage cuts, any Tesla workers (bar those whose work is considered critical) who cannot work from home will be furloughed without pay. A positive note here is those furloughed workers will keep their health benefits.
The memo says workers can expect the pay cuts to last until the end of the second quarter, while furloughed workers will be asked to return on May 4. That’s the day after current stay-at-home orders end in Fremont, California, where Tesla’s U.S. production facility is located. Tesla currently employs about 56,000 people.