Yes, Tesla will have layoffs, reports indicate Elon Musk confirmed on Tuesday. And even though the cuts will impact some 10% of salaried workers, according to Musk, who spoke at a Bloomberg event at the Qatar Economic Forum on Tuesday, the company does anticipate it would grow its hourly workers.
Reuters reported earlier this month that an email obtained by the news organization from Musk to company executives described Musk outlining the pending layoffs and also included a statement that he had a “super bad feeling” about the economy.
But on Tuesday, Musk said the headcount would only be reduced, in total, by about 3.5%, Bloomberg reported.
Earlier this month, Musk tweeted and noted headcount would increase but salaried workers would be “fairly flat.”
Musk reportedly plans to lay off 10% of Tesla workers; stock drops
New lawsuit filed against Tesla
Musk’s appearance at the Qatar Economic Forum came days after two former Tesla employees filed a lawsuit against the company.
The lawsuit, which was reported first by Reuters, alleges that the company’s decision to lay off workers earlier this month violated federal law because the company did not file a required legal notice prior to the termination.
That law, the Worker Adjustment and Retraining Notification Act, or WARN Act, requires companies to notify specific entities when mass layoffs will occur.
Reuters reported that Musk called the lawsuit “trivial” and CNBC reported Musk as saying the lawsuit had “no standing.”
“I find it very concerning that the richest man in the world considers it “trivial” that his company is blatantly violating federal labor law to protect workers,” Shannon Liss-Riordan, an attorney representing the two workers in the lawsuit, told WRAL TechWire on Tuesday. “While two months pay certainly doesn’t matter to him, it matters a lot to the employees who made his company what it is.”
The two workers are seeking two months of pay and benefits for the equivalent of what would have been the 60-day notification period granted to workers under the WARN Act.
Liss-Riordan told Reuters that Tesla is offering some employees one week of severance pay.
“That Musk would so callously dispose of thousands of his employees when he doesn’t need them any more, without even the courtesy of a proper severance, and then label their challenge to his illegal activities “trivial”, speaks volumes about his character,” said Liss-Riordan. “There is a reason we have worker protection laws in this country – because billionaires and company heads will not do right by their workers when left to their own devices. We need strong laws to protect workers and we need to enforce them vigorously.”
Liss-Riordan is also the attorney representing former IBM employees in a lawsuit alleging age discrimination.
