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Tesla’s furlough calls begin with delivery and sales taking a hit

Tesla started Friday to furlough its sales and delivery workforce — with the least experienced employees bearing the brunt of the action — days after a companywide email announced salary cuts and reductions due to the COVID-19 pandemic.

Several employees, who work in sales and delivery and spoke to TechCrunch on condition of anonymity, reported they were on corporate calls in which more details of the furloughs were explained. Performance is less of a factor. Instead, experience and position is being used to determine who stays and who is furloughed. Delivery and sales advisors who have been with the company less than two years will be furloughed, according to sources.

CNBC reported earlier Friday that furloughs would impact half of Tesla’s U.S.  delivery and sales workforce. TechCrunch was unable to verify the total number of sales and delivery employees who would be impacted.

The furloughs also come a little more than a week after the end of the quarter, a typically busy time for delivery staff who try to meet lofty internal goals. COVID-19 hampered delivery efforts, although customers were still reporting deliveries in California, New York and other states.

The furlough calls have been expected since an internal email sent April 7 by Tesla’s head of human resources Valerie Workman informed employees that the company would be cutting pay for salaried employees and furloughing others.

It wasn’t clear, until Friday, exactly who might be affected.

The internal email, which was viewed by TechCrunch, told employees that production at its U.S. factories would be suspended until at least May 4 due to the COVID-19 pandemic, requiring the company to cut costs.

Salaried employees will have pay reduced between 30% and 10%, depending on their position. The salary reductions are 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.

Tesla to cut salaries, furlough workers as COVID-19 shutdowns expected to last until May 4

Tesla will suspend production at its U.S. factories until at least 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’s 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.”

“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 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.

Tesla announced March 19 plans to suspend production at its Fremont and Buffalo factories. At the time, the company didn’t say when it expected to restart production. The production suspension at its Fremont factory was set to begin 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’s charging infrastructure and what it describes as its “vehicle and energy services operations” has continued at the Fremont 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 COVID-19 pandemic. 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 had available 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.

Mike Pence wants an apology after the AP publishes second lady's email address

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Vice President Mike Pence’s email controversy is growing. 

Pence is demanding the Associated Press take down the private email address of his wife, Karen, after the AP published it, in a report detailing how the Pences used private email addresses to carry out official business for years when Mike Pence was the governor of Indiana. 

Mike Pence believes the AP owes his wife an apology. 

Last night the @AP published my wife’s private email address, violating her privacy and our security…

— Vice President Pence (@VP) March 4, 2017 Read more…

More about Governor, Indianapolis Colts, Private, Email, and Karen Pence

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