Tesla CEO Elon Musk said some severance packages sent to some of the more than 14,000 Tesla employees laid off this week were “incorrectly” low.
“As we reorganize Tesla it has come to my attention that some severance packages are incorrectly low,” Musk said in a brief email sent to employees on Wednesday reported by CNBC. “My apologies for this mistake. It is being corrected immediately.”
Tesla issued its largest round of layoffs in its 20-year history on Sunday, firing “more than 10%” of its 140,000 workers worldwide. Although it’s unclear exactly how many workers have been laid off, teams and divisions across the company have lost between 10% and 20% of their staffing.
Workers were notified by a memo written by Musk sent to their personal email accounts, which notified staff they had been terminated effective immediately — although many employees had not seen or received the message before they went to work Monday. Workers have described only discovering their unemployment after being turned away by security at the door when their ID badges failed to work.
“Tried to badge in, and the security guard took my badge and told me I was laid off,” Nico Murillo, a former production supervisor for Tesla in Fremont, California, wrote Wednesday on LinkedIn. “Sat in my car in disbelief.”
Tesla offered laid-off workers two months of severance pay and health insurance for workers who were covered by the company’s plans, Business Insider reports. In return, the ex-employees are required to sign an offered contract — which prohibits them from joining in any lawsuit or mass arbitration against the company, publicly defaming Tesla, or sharing trade secrets — within five days of receiving the offer. The severance agreement did not mention equity awards or unused paid time off, Business Insider reports.
According to a Worker Adjustment and Retraining Notification Act (WARN) filing in New York, 280 employees have been laid off at Tesla’s facility in Buffalo. That comes out to about 14% of the workforce at the factory, which produces Supercharger components and Solar Roof panels. WARN Act filings had not been made public in other states where Tesla has factories — California, Texas, and Nevada — as of early Thursday morning.
“Several dozen people” have been laid off in Tesla’s Shanghai factory, Reuters reports. Tesla also laid off 3,000 of its some 12,000 workers in Germany, according to local media reports, although the company has refuted those claims.
Andrew Baglino, Tesla’s senior vice president for energy engineering and powertrain, resigned on Sunday after an 18-year tenure with the automaker. Baglino is also one of Tesla’s four executive leaders and teams he oversaw have been reportedly gutted by the layoffs. Rohan Patel, Tesla’s vice president of public policy and business development, has also left the company.
Tesla stock slid more than 2% in pre-market trading Thursday after being downgraded from a buy rating to a hold rating by Deutsche Bank, which also lowered its price target from $189 per share to $129. The firm had based its buy rating on hopes Tesla would unleash a $25,000 electric car next year, which has been canceled as it focuses on a self-driving robotaxi.
Tesla stock has fallen about 37% so far in 2024, making Tesla one of the worst performers in the S&P 500,