Tesla is reportedly sending hourly employees home early and asking them to take time off as the company cuts costs

  • Tesla’s significant cost-cutting effort has affected employee work schedules and the supply of some small parts used to make vehicles, CNBC reported on Thursday.
  • Tesla declined Business Insider’s request for comment.
  • CNBC also reported that Tesla had laid off about 8% of its employees in the past week, a move Tesla CEO Elon Musk had said was necessary to lower the price of the automaker’s Model 3 sedan.

Tesla’s significant cost-cutting effort has affected employee work schedules and the supply of some small parts used to make vehicles, CNBC reported on Thursday.

CNBC described three cost-reduction measures that Tesla had not made public:

  • Asking employees to work remotely and keep travel to a minimum.
  • Telling hourly employees at the Gigafactory – the factory in Sparks, Nevada, where Tesla makes batteries and drivetrains – to leave in the middle of their shifts and asking them to take paid or unpaid time off. (CNBC notes that some shifts have been canceled when snow has closed a highway used to transport supplies to and from the Gigafactory.)
  • Reducing the number of some small parts, like rivets and fasteners, available at Tesla’s vehicle-assembly plant in Fremont, California.


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Citing current and former Tesla employees, CNBC also reported that Tesla had laid off about 8% of its employees in the past week.

Tesla declined Business Insider’s request for comment.

Tesla said on February 28 that it would close many of its stores and convert remaining ones into galleries and information centres as it shifts to an online-only sales model.

The move would lead to layoffs, Tesla CEO Elon Musk said during a conference call after the announcement, though he declined to specify the size of the layoffs. He described them as part of a cost-cutting effort designed to make a price reduction for Tesla’s Model 3 sedan financially feasible.

The latest round of layoffs is Tesla’s third in the past year. The automaker followed a 9% workforce reduction in June with a 7% cut in January.

Musk suggested in a June email to employees that the automaker would never again have to initiate another round of layoffs.

“I also want to emphasise that we are making this hard decision now so that we never have to do this again,” Musk said at the time.

Read CNBC’s full report ยป

Were you affected by the Tesla layoffs? Have a Tesla news tip? Contact this reporter at [email protected].

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