INSUBCONTINENT EXCLUSIVE:
Tesla is suspending production at its U.S
factories until May 4 due to the COVID-19 pandemic, prompting the company to cut pay for salaried employees between 10% and 30% and furlough
workers, according to an internal email sent Tuesday night and viewed by TechCrunch.
Pay cuts for salaried employees — which ranges from
30% for vice presidents, 20% for director-level executives and 10% for the remaining workforce — is expected to be in place until the end
of the second quarter, according to the email
The salary cuts and furloughs will begin April 13
Employees who cannot work from home and have not been assigned critical onsite positions will be furloughed until May 4, according to the
email.
&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,& the email from Tesla human resources department head Valerie Workman
&Until that time, it is important we take action to ensure we remain on track to achieve our long-term plans.&
Tesla operates a number of
factories and facilities throughout the U.S., namely its main assembly plant in Fremont, Calif., its Nevada gigafactory that produces
battery packs and electric motors for the Model 3 and its factory in Buffalo, New York, which makes solar products.
&This is a shared
sacrifice across the company that will allow us to progress during these challenging times,& the email read.
Furloughed employees will
remain employees of Tesla without pay
They will their healthcare benefit
The email directs furloughed employees to apply for unemployment benefits.
Tesla said in the email to employees that it will also put any
merit-based actions such as equity grants on hold.
Tesla suspended production at its Fremont factory beginning March 23, a week after a
shelter in place order went into effect in Alameda County due to the COVID-19 pandemic.
Some basic operations that support Tesla charging
infrastructure and what it describes as its &vehicle and energy services operations& has continued at the factory, which under normal
circumstances employs more than 10,000 people
About 2,500 workers are still working at the plant.
Tesla said in March that it had enough liquidity to weather the shutdown caused by the
Its cash position at the end of the fourth quarter was $6.3 billion before its recent $2.3 billion capital raise.
&We believe this level of
liquidity is sufficient to successfully navigate an extended period of uncertainty,& Tesla said.
The company hadavailable credit lines worth
about $3 billion, including working capital lines for all regions as well as financing for the expansion of its Shanghai factory at the end
of the fourth quarter of 2019.
