Coronavirus News: Tesla Furloughs Nonessential Workers, Reduces Pay

As Tesla (TSLA) ramps down vehicle production during the coronavirus pandemic, the electric carmaker has reportedly furloughed nonessential workers and reduced the salaries of its other employees until May 4.

The announcement was made to employees on Tuesday morning in an email by Tesla’s head of North American human resources and in-house counsel, Valerie Workman, which was obtained by CNBC. In the notice, Workman said the company was only keeping “minimal critical operations running.”

The email said, “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. Until that time, it is important we take action to ensure we remain on track to achieve our long-term plans."

Starting on April 13, Tesla said it would be taking some cost-cutting measures, which include temporarily reducing the pay of its salaried employees and placing those that do not have the ability to work from home or were not deemed “critical” on furlough.

According to the email, “For U.S. employees, these reductions are 30% for Vice Presidents and above, 20% for Directors and above, and 10% for everyone else.

“For non-U.S. employees, there will also be comparable reductions, of which the specifics will be communicated by the local leadership team in accordance with local laws and works-councils.”

The order is expected to be in place until the end of Q2, with furloughed workers continuing to receive healthcare benefits, the email said.

Tesla joins Honda and Nissan, which furloughed thousands of employees this week as their production facilities in the U.S. remain closed. Tesla also closed its Fremont, California, plant in March after a shelter-in-place order was put in effect for the area.

Ford and GM continue to keep their U.S. production facilities closed, and have not announced when they reopen vehicle production. Fiat Chrysler announced that it would resume production on May 4.

Shares of Tesla stock were down 1.24% as of 10:22 a.m. EDT on Wednesday.