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On Tuesday, Elon Musk confirmed rumors that he’s going to slash 10 percent of Tesla’s salaried staff over the next three months, triggering a class action lawsuit from workers, who accuse the company of violating labor laws.
Though the electric car company chief said that his overall workforce would only be slimmed by 3.5 percent because he’s going to bring in more hourly workers.
‘We grew very fast on the salaried side,’ Musk said at the Qatar Economic Forum, sponsored by Bloomberg.
‘A year from now, I think our headcount will be higher’ in salaried and hourly workers, but for now the reduction will be 3% to 3.5%, he said.
Tesla plant in Fremont, California. Elon Musk has promised to trim 10 percent of the company’s salaried workers
Talk had been swirling of companywide layoffs since the beginning of the month when Reuters reported Musk was looking to downsize the company.
The Texas-based car manufacturer has swelled to about 100,000 workers worldwide, with most of the hiring being done in Austin, Texas and Berlin.
On Sunday, workers filed a class action claim in Texas federal court, charging that the company violated the WARN Act (Worker Adjusted and Retraining Notification Act) that requires 60-day notice for mass layoffs.
Musk, 50, pictured here at the opening of a Telsa plant in Gruenheide, Germany in March 2022
Telsa factory workers in German pose for a photo after the manufacture of the plant’s 1000 vehicle on June 17
According to the suit, 600 employees were canned in the Sparks, Nevada plant in June.
‘It’s pretty shocking that Tesla would just blatantly violate federal labor law by laying off so many workers without providing the required notice,’ Shannon Liss-Riordan, an attorney representing the workers, told Reuters.
The lawyer wants to block Tesla from having workers sign a release in exchange for one week’s severance pay.
Musk brushed off the litigation as overhyped.
‘Let’s not read too much into a pre-emptive lawsuit that has no standing,’ he said at the Bloomberg event.
‘That is a small lawsuit of minor consequence. Anything related to Tesla gets big headlines, whether it is, you know, a bicycle accident or something much more serious. 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.’
Musk touched on a number of labor related issues during the event, including his controversial stance against working from home.
The Telsa Technoking, as Musk calls himself, has drawn a line in the sand with employees, warning them to come back to the office or quit.
‘Everyone at Tesla is required to spend a minimum of 40 hours in the office per week,’ according to a Musk email obtained by Bloomberg with the subject line: ‘To be super clear.’
‘Moreover, the office must be where your actual colleagues are located, not some remote pseudo office. If you don’t show up, we will assume you have resigned,’ the billionaire businessman told employees.
He reminded workers that he had once set up residence inside a Tesla factory.
‘If I had not done that, Tesla would long ago have gone bankrupt,’ he wrote.
He tipped his hat to Chinese workers, some of who also lived at Tesla’s Shanghai factory during Covid lockdown, according to Bloomberg.
‘I am very impressed with the car companies in China, just in general companies in China,’ Musk at the Tuesday event. ‘I think they’re extremely competitive, hard-working and smart.’
