Tesla Cuts Salaries, Furloughs Workers Amid Pandemic Wind-Down

Tesla will cut salaries by as much as 30% and furlough workers in the wake of the electric carmaker’s forced production wind-down due to the coronavirus pandemic.
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Tesla will  (TSLA) - Get Report will cut salaries by as much as 30% and also furlough some of its U.S. workers after the electric carmaker was forced to wind down production because of the coronavirus pandemic.

Starting next Monday, U.S. employees at the electric car and solar battery system maker 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 rises and equity grants will also be put on hold.

Employees who haven’t been assigned to critical tasks and who can’t work from home will be furloughed without pay, though they will keep healthcare benefits, the internal email said.

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 is running "minimum critical operations" at the moment, and expects to resume full operations at U.S. plants in early May "barring any significant changes," the email said.

Tesla is getting back to business in other parts of the world, namely in China, where the carmaker is expected to unveil a new version of its Model 3 sedan that has a range of more than 400 miles.

After resuming operations on Feb. 10, the factory has ramped back production, producing 3,000 cars a week, Tesla said last month.

The new iteration of the vehicle, which will come with a higher price tag, should begin rolling off the assembly line within days, according to reports.

Meanwhile, the company is also working on repurposing some of its operations and staff to produce much-needed ventilators to help in the front-line battle in assisting those who have contracted Covid-19.

Shares of Tesla were up 1.01% at $550.94 in trading on Wednesday.