Tesla slices wage packets, furloughs staff in coronavirus outbreak ‘shared sacrifice’

Tesla has announced pay cuts and intends to furlough employees for a number of weeks in response to the coronavirus pandemic. 

In an email obtained by Electrek, the automaker, co-founded by CEO Elon Musk, said that “minimum critical operations” are still running but in order to manage costs, a “shared sacrifice” must be made.

This “sacrifice” is the same that many businesses across the world are taking rather than fire workers — either cutting salaries, furloughing staff, or both. 

In Tesla’s case, pay will be temporarily reduced for salaried staff. Starting 13 April, US employees at a rank of vice president or above will take a 30% cut; directors will take a 20% pay reduction, and everyone else will have their paychecks reduced by 10%.

See also: Coronavirus: Apple and Tesla reveal the new products they’re making in COVID-19 fight
Staff members outside the United States will also have a “comparable” pay cut. 

Furloughed employees, however, will not receive pay. 

“Employees who cannot work at home and have not been assigned to critical work onsite will be furloughed,” the letter reads. “Under furlough, you remain an employee of Tesla (without pay) and retain your healthcare benefits.”

Tesla says that the “vast majority” of furloughed workers will receive roughly the same pay through unemployment benefits.

While the reduction in salaries is expected to continue until the end of Q2 2020, Tesla is hopeful that production in US facilities will be back to normal on 4 May.  

“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,” the letter continues. “We respect your decision and you will not be penalized.”

CNET: Coronavirus updates: Wuhan ends lockdown, UK prime minister in stable condition in ICU

The 4 May date is of interest and as noted by the publication may relate to Tesla’s Fremont factory and when local shelter-in-place rules are expected to lift, barring any significant changes. The factory was closed several weeks ago. 

Employees remaining in production capacities and working in research facilities are not just focused on business-as-usual projects. Instead, Musk’s teams have been developing prototype ventilators that could be valuable in the fight against COVID-19. 

TechRepublic: Coronavirus: What business pros need to know

Using components from Tesla vehicles — and, therefore, already established in the supply chain — engineers have created two ventilator designs including elements such as mixing chambers, pressure and flow-rate sensors, and screens powered by Tesla Model 3 infotainment systems. 

Previous and related coverage

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