The novel coronavirus outbreak has put brakes on the global economy. The once highly interconnected world has now imposed travel bans and countries have gone into a lockdown. Businesses are closed and employees are now asked to work from home. But the remote working concept is only limited to certain kinds of jobs. The manufacturing industry simply can’t do away with this. Manufacturing sector is left with no other option than to ask employees to sit at home and close down their factories.
The recent company to follow the suit is electric vehicle manufacturer Tesla. Tesla recently told its employees that it would furlough all non-essential workers and implement salary cuts during a shutdown of its U.S production facilities because of the coronavirus outbreak.
The development was first reported by the news website Electrek, providing a copy of the mail sent by Tesla HR Head to its employees. In an email to employees, Tesla announced pay cuts and furloughs while also saying that it plans to resume production by May 4th. Due to the shelter-in-place order in the Bay Area, Tesla had to shut down the Fremont factory two weeks ago.
In the email sent to employees, Tesla’s head of HR Valerie Capers Workman explained that all salaried employees that can work from home or are assigned “critical roles” are taking a temporary pay cut from 10 to 30% depending on their level in Tesla’s payscale. Employees who can’t work from home or are not considered “essential” will be put on furlough. Comparable reductions are also expected to be implemented abroad.
She asserted that the decisions were part of a broader effort to manage costs and achieve long-term plans. According to the mail, pay for salaried Tesla employees will be reduced beginning on April 13 and cuts will remain in place until the end of the second quarter.
Tesla’s sole U.S. auto factory employs more than 10,000 workers, with annualized production of slightly more than 415,000 units by the end of December 2019. The suspension interrupts a planned ramp-up in production of its Model Y sport utility vehicle at the factory.
Chief Executive Elon Musk has said in the past that demand for the Model Y is expected to be higher than for all of Tesla’s other models combined. The Model Y taps into strong demand for SUVs and is much less expensive than the high-end Model X.
HrNxt has also accessed the copy of the email and can independently verify the news report. Here is a copy of the email in full:
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