Elon Musk Clarifies Tesla will Reduce Workforce by 10% as Ex-employees Sue The Car Maker

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Elon Musk clarified how many Tesla workers will be laid off, following the launch of a lawsuit by former employees who claim the automaker breached U.S. labor laws.

Speaking at an event hosted by Bloomberg on Tuesday, Musk said Tesla would decrease its salaried workforce by 10% in the next three months while growing the number of hourly employees.

According to a report earlier this month from Reuters, Musk wanted to reduce the number of employees by 10%, citing an internal email penned by the Tesla CEO. In the memo, Musk reportedly said he has a “super bad feeling” about the economy.

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In a follow-up email to Tesla staff obtained by CNBC, Musk clarified the firm will be cutting off salaried jobs by 10% and increasing its hourly staffing.

Musk said Tuesday that Tesla’s layoff announcement would affect around 3.5% of its overall workforce, adding the actual amount was “not super material.” Salaried workers account for about two-thirds of Tesla employees, he added.

“A year from now, I think our head count will be higher in both salaried and obviously in hourly,” Musk said.

On Sunday, two former Tesla employees filed a lawsuit against the company alleging it violated U.S. federal laws regarding “mass layoffs.” Under the Worker Adjustment and Retraining Notification Act, employers are required to give 60 days advance notice of a mass layoff or plant closure.

Musk, the richest person in the world, dismissed the importance of the suit Tuesday, saying it has “no standing.”

“That is a small lawsuit of minor consequence,” he said. “Anything that relates to Tesla gets big headlines, whether it is a bicycle accident or something much more serious.”

Musk’s treatment of workers has been under scrutiny lately. He recently told Tesla employees that they should be in the office at least 40 hours a week or quit.

According to Business Insider “The company has [also] faced allegations of racism against Black workers. In February, the California Department of Fair Employment and Housing sued Tesla over complaints about racial discrimination and harassment.”