Tesla to furlough workers and cut salaries due to coronavirus
Tesla will furlough all non-essential employees and roll out salary cuts after it was forced to shut its factories in the US due to the coronavirus outbreak.
Employees who cannot work from home and have not been assigned to critical work will be furloughed, according to an internal email seen by Reuters.
Workers who are kept on will have their pay reduced from 13 April and the cuts will remain in place until the end of the second quarter.
In the US, workers’ salaries will be cut by 10 per cent while directors will take a 20 per cent pay cut. Vice presidents will have their pay slashed 30 per cent.
Elon Musk’s electric car firm said the move was part of a wider effort to manage costs and achieve its long-term plans. Shares in Tesla were up 1.75 per cent in premarket trading.
Tesla suspended production at its San Francisco vehicle factory and New York solar roof tile factory on 24 March due to the pandemic.
In the email today, the company said it planned to resume operations on 4 May, barring any significant changes.
Tesla employs more than 10,000 people at its car factory, which produced just over 415,000 vehicles last year.
Before the health crisis the firm had been planning to ramp up production of its Model Y SUV, which is expected to generate high demand.
Tesla has said it has enough liquidity to survive the period of uncertainty during the pandemic, with $6.3bn (£5.1bn) in cash at the end of the third quarter, ahead of a recent $2.3bn funding raise.