Tesla (TSLA) - Get Report has sought rent reductions from some of its landlords as it looks to preserve cash after the electric car company's operations were stalled by the coronavirus outbreak, The Wall Street Journal reported.
“The rapid world pandemic that is now affecting our country has led Tesla to make strategic decisions to ensure the company’s long term success and growth,” read an email the company sent to landlords that was reviewed by the Journal. “As a result of the increasing restrictions on our ability to conduct business, we would like to inform you that we will be reducing our monthly rent obligations effective immediately.”
The company told its landlords that it would like to discuss options “so we can continue to partner and work together to ensure a continued and mutually beneficial relationship,” the Journal reported.
Tesla last week said it would cut salaries by as much as 30% and also furlough some of its U.S. workers after it was forced to wind down production.
U.S. employees at Tesla 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%, according to an internal email.
The reductions are expected to be in place until the end of June. Pay increases and equity grants also will be put on hold.
Tesla had initially kept its U.S. operations running as the coronavirus washed up on U.S. shores and as California imposed the first statewide lockdown in the country, deeming producing Tesla vehicles as an “essential service.”
However, on March 18, the sheriff of the California county where its sole U.S. assembly plant is located ordered the plant closed amid the state’s shelter-in-place order.
Tesla was rising 7.77% to $701.25 in premarket trading. The stock has risen sharply over the last six sessions following Tesla's deliveries report for the first quarter.