Tesla Announces Pay Cuts And Furloughs, Even As Its Advantages Persist

It's factory has been closed for almost three weeks. And at least the pay cuts are being handled progressively, eg, that higher paid staff are taking bigger hits.

But so much for assuming that this is a brotherhood rather than a business. JL

Timothy Lee reports in ars technica:

Tesla announced that salaried workers would take pay cuts of 10% or more through the end of June. Most hourly workers—many of whom haven't been working since Tesla shut down its Fremont factory last month—are being formally furloughed, making them eligible to claim unemployment benefits. Tesla is slashing pay for vice presidents by 30% and directors by 20%.

Tesla announced Tuesday that salaried workers would take pay cuts of 10 percent or more through the end of June. Most hourly workers—many of whom haven't been working since Tesla shut down its Fremont factory last month—are being formally furloughed, making them eligible to claim unemployment benefits. The changes take effect on April 13.

"We expect to resume normal production at our US facilities on May 4, barring any significant changes," the email from Tesla HR said. It said that pay cuts and furloughs were a "shared sacrifice across the company that will allow us to progress during these challenging times."

Tesla is slashing pay for vice presidents by 30 percent and directors by 20 percent. Lower-level salaried employees will see their pay fall by 10 percent. These are predominantly white-collar workers who have been able to continue working from home.

"Employees who cannot work at home and have not been assigned to critical work onsite will be furloughed," the email says. Furloughed employees will continue to receive benefits, including health insurance. And thanks to the recently passed $2.2 trillion coronavirus relief bill, workers will be eligible for higher-than-usual unemployment benefits. Tesla says that "for the vast majority of furloughed employees, unemployment benefits will be roughly equivalent to normal take home pay."

Some employees performing "critical functions" will continue reporting for work; California's stay-at-home orders allow companies to continue basic on-site activities like maintaining security and keeping IT infrastructure running so others can work from home.

Tesla shut down its Fremont manufacturing facility on March 23 under pressure from county health officials. CEO Elon Musk had previously expressed skepticism about the dangers of the coronavirus, tweeting on March 16 that "danger of panic far exceeds danger of corona." He kept Tesla's main US car factory open for a week after Bay Area officials ordered all non-essential businesses to close but finally shut the factory down after Alameda County tweeted that "Tesla is not an essential business."

Late last month Tesla announced plans to begin manufacturing ventilators at Tesla's solar panel factory in Buffalo, New York, in partnership with Medtronic. It's not clear how much progress Tesla has made in that effort.