May 30, 2024


Tesla cut 10 percent of its workforce a few weeks ago, and now we’re getting a better look at what sort of severance package its recently laid-off workers are getting. CEO Elon Musk sent an email to impacted employees late at night on April 14 letting them know they were immediately terminated and cut out of Tesla’s internal systems. He also told them that they would receive their severance information “within 48 hours.”

Now, Business Insider is reporting the Austin, Texas-based automaker is offering workers two months of severance pay, which means they’d get paid through June 14, according to five former workers who spoke to the outlet. It does not appear that the packages are weighted based on the length of service at Tesla. That means workers with anywhere from a few months to several years of work at the automaker got the same number of weeks paid out. Brutal. That, folks, is why ya need a union.

Additionally, Tesla workers were given “either 30 days or 3 months (or both)” from their termination date to exercise their vested stock options. Staff would also have the PTO that they’d accrued leading up to their termination date paid out in their final paycheck.

Coincidentally, the two months of severance is just about the exact amount of time you need to skirt the WARN Act, as Business Insider explains:

Under the Worker Adjustment and Retraining Notification Act, companies that have more than 100 workers are required to provide 60 days of notice before a large-scale layoff. But Tesla’s severance offer could address any potential penalties if it were found to have violated the WARN Act, which says laid-off employees can be entitled to up to 60 days of pay and benefits if not given proper advanced notice.

Tesla is also offering to pay the cost of COBRA health insurance for two months for workers who had coverage through the company, according to a severance-package offer viewed by BI.

Like all things with Tesla (and big companies in general), strings are attached to the severance package. Apparently, in order to get the payout, laid-off workers have to sign a contract that stops them from participating in any lawsuit or mass arbitration against the automaker, sharing any of the company’s trade secrets or publicly defaming Tesla. Business Insider says this is fairly standard for severance agreements.

Laid-off workers will have to sign the agreement within five business days of its receipt, and it will give them severance pay for 45 days after their termination date.

Lest we forget that Tesla initially sent the wrong severance information to its employees, which caused Musk actually to apologize about something for once. That’s growth.

You should really head over to BI for more information on just what now-former Tesla employees are getting from the automaker.

A version of this article originally appeared on Jalopnik.



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