In an email sent to his employees,Elon Musk, CEO, Tesla, has formally apologised for what he termed as “incorrectly low” severance packages. This comes in the wake of the American electric vehicle giant’s recent announcement of a 10 per cent reduction in its global workforce, affecting about 14,000 employees based on 2023 year-end data.
Musk reportedly acknowledged discrepancies in the severance packages and assured employees that the issue is being promptly rectified, issuing an apology.
Some employees who were laid off earlier in the week received severance equivalent to two months’ pay. This falls short of the minimum requirement set by the Worker Adjustment and Retraining Notification Act. The Act mandates a 60-day notice and pay for employees affected by mass layoffs in companies with over 100 employees.
Employees were reportedly informed of their termination if their ID badges ceased to function.
Tesla justifies the recent layoffs as a strategic move to position the company for future growth phases.
However, Reuters previously indicated a shift in Tesla’s strategy, with plans to abandon a previous initiative for a more affordable electric vehicle in favour of prioritiaing robotaxi development. Musk refuted the Reuters report but refrained from confirming any specific timeline for the project’s launch.
Meanwhile, Tesla is poised to enter the Indian market, with Elon Musk scheduled to meet with Prime Minister Narendra Modi in New Delhi on 22 April. The company aims to establish its manufacturing presence in the country, which has been hindered by high import duties on luxury cars.
In response to this barrier, the Indian government has announced significant revisions to its electric vehicle policy to incentivise foreign companies to establish manufacturing facilities within its borders.
