Tesla broke the news to employees Tuesday that they should brace for pay cuts and furloughs beginning Monday amid the coronavirus pandemic. In an internal email obtained by CNN, employees were warned that Tesla is running "minimum critical operations" from now until May, "barring any significant changes," which would result in major changes for their day-to-day.
Employees at Tesla who hold director and vice president-level roles will be subject to pay cuts of 20 percent to 30 percent, the email continued, while all other employees will receive a pay cut of 10 percent. Pay raises and equity grants have also been put on hold. These restrictions are scheduled to run through the end of June, which the company called in the email "a shared sacrifice ... during these challenging times." Employees unable to continue their work from home who have been deemed not critical will be furloughed, but unable to receive unemployment benefits "roughly equivalent to take home pay."
The final full week in March, 6.6 millions Americans filed new claims for unemployment benefits, according to numbers released by the Labor Department last week. This marked a record number for the second week in a row amid the coronavirus outbreak. The week prior, 3.3 million Americans had filed for unemployment, marking another record for the U.S., which prior to the coronavirus pandemic marked its worst week for unemployment in 1982 with 695,000 filings, as per The New York Times.
"The COVID-19 virus continues to impact the number of initial claims," the Labor Department noted at the top of its weekly report. "Nearly every state providing comments cited the COVID-19 virus. States continued to identify increases related to the services industries broadly, again led by accommodation and food services. However, state comments indicated a wider impact across industries. Many states continued to cite the health care and social assistance, and manufacturing industries, while an increasing number of states identified the retail and wholesale trade and construction industries."