News Update

Musk talks Tesla job cuts plan as former employees sue over ‘mass layoff’

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Tesla CEO Elon Musk made his first in-person appearance since Reuters reported earlier this month the company was planning issue job cuts affecting 10% of salaried staff. Speaking virtually at an economic forum in Qatar, Musk described the cuts as “not super material.”

According to Musk, the cuts will happen over the next three months. Since they would only affect salaried staff, the total Tesla staff would only be cut by 3.5%.

In its report earlier this month, Reuters cited Musk as saying Tesla needed to “pause all hiring worldwide” because Musk had a “super bad feeling” about the economy. Musk discussed the potential of a recession on Tuesday.

”Well, I think a recession is inevitable at some point as to whether there is a recession in the near term. I think that is more likely than not,” Musk said. “Certainly isn’t a certainty, but it appears more likely than not.”

Musk’s job cuts comments came two days after two former Tesla employees filed a lawsuit over what they’re calling a “mass layoff” at Tesla’s gigafactory plant in Sparks, Nevada. According to the suit, more than 500 employees were terminated at the plant. The suit claims the layoff violated federal law because the company did not provide advance notice of the job cuts.

“Tesla has simply notified the employees that their terminations would be effective immediately,” the complaint said. Shannon Liss-Riordan, an attorney representing the workers, added “it’s pretty shocking that Tesla would just blatantly violate federal labor law by laying off so many workers without providing the required notice.”

While Tesla did not immediately respond to requests for comment about the lawsuit, Musk did address the lawsuit at the forum.

“Let’s not read too much into a pre-emptive lawsuit that has no standing,” Musk said. “It seems like anything related to Tesla gets a lot of clicks, whether it is trivial or significant. I would put that lawsuit you’re referring to in the trivial category.”

Reuters contributed to this report.

Jimmie Johnson: ELON MUSK IS CLARIFYING HIS PLAN TO CUT JOBS AT TESLA.
SPEAKING IN QATAR EARLIER TODAY — MUSK SAID THE CUTS WOULD ONLY APPLY TO 10 PERCENT OF SALARIED WORKERS OVER THE NEXT FEW MONTHS.
THIS WOULD REDUCE TESLA’S TOTAL STAFF BY THREE-AND-A-HALF PERCENT.
MUSK IS DOWNPLAYING THE CUTS – BUT ALSO FACES A LAWSUIT OVER THE MOVE.
TWO FORMER EMPLOYEES SUED OVER WHAT THEY CALL A “MASS LAYOFF” AT THEIR NEVADA FACTORY.
THEY ALLEGE THE COMPANY DID NOT GIVE ADVANCE NOTICE OF THE LAYOFFS — WHICH INCLUDED MORE THAN 500 EMPLOYEES.

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Tesla CEO Elon Musk made his first in-person appearance since Reuters reported earlier this month the company was planning issue job cuts affecting 10% of salaried staff. Speaking virtually at an economic forum in Qatar, Musk described the cuts as “not super material.”

According to Musk, the cuts will happen over the next three months. Since they would only affect salaried staff, the total Tesla staff would only be cut by 3.5%.

In its report earlier this month, Reuters cited Musk as saying Tesla needed to “pause all hiring worldwide” because Musk had a “super bad feeling” about the economy. Musk discussed the potential of a recession on Tuesday.

”Well, I think a recession is inevitable at some point as to whether there is a recession in the near term. I think that is more likely than not,” Musk said. “Certainly isn’t a certainty, but it appears more likely than not.”

Musk’s job cuts comments came two days after two former Tesla employees filed a lawsuit over what they’re calling a “mass layoff” at Tesla’s gigafactory plant in Sparks, Nevada. According to the suit, more than 500 employees were terminated at the plant. The suit claims the layoff violated federal law because the company did not provide advance notice of the job cuts.

“Tesla has simply notified the employees that their terminations would be effective immediately,” the complaint said. Shannon Liss-Riordan, an attorney representing the workers, added “it’s pretty shocking that Tesla would just blatantly violate federal labor law by laying off so many workers without providing the required notice.”

While Tesla did not immediately respond to requests for comment about the lawsuit, Musk did address the lawsuit at the forum.

“Let’s not read too much into a pre-emptive lawsuit that has no standing,” Musk said. “It seems like anything related to Tesla gets a lot of clicks, whether it is trivial or significant. I would put that lawsuit you’re referring to in the trivial category.”

Reuters contributed to this report.

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