Elon Musk clarifies Tesla’s layoffs after former employees sue the company

Tesla CEO Elon Musk.

Patrick Pleul AFP | Getty Images

Elon Musk tried to clarify how much Tesla workers will lose their jobs after a lawsuit is filed by former employees who claim the carmaker violated U.S. labor laws.

Speaking at an event hosted by Bloomberg on Tuesday, Musk said Tesla would cut its workforce by 10% over the next three months, while increasing the number of employees per hour.

or report earlier this month, Reuters said Musk wanted to cut 10% of jobs, citing an internal email written by Tesla’s chief executive. In a note, Musk said he had a “super bad feeling” about the economy.

But in a follow-up email to Tesla staff at CNBC, Musk said the company would reduce its staff by 10 percent and increase its hourly staff.

Musk said on Tuesday that this means that Tesla’s announcement of layoffs will affect about 3.5% of the total workforce, adding that the actual amount “is not super material”. Salary workers make up about two-thirds of Tesla’s employees, he added.

“In a year, I think our employees will be higher both in salary and per hour,” Musk said.

On Sunday, two former Tesla employees filed a lawsuit against the company claiming it violates U.S. federal laws on “mass layoffs.”

According to the Law on Notification for Adaptation and Retraining of Workers, employers are obliged to notify 60 days in advance of mass dismissal or closure of the plant.

Musk, the world’s richest man, denied the claim on Tuesday, saying he had “no reputation”.

“This is a small lawsuit with minor consequences,” he said. “Everything related to Tesla gets big headlines, whether it’s a bike crash or something much more serious.

Musk’s attitude toward workers has been under scrutiny lately. He recently told Tesla employees that they must enter the office at least 40 hours a week or leave the company.

While other technology chiefs – including Parag Agraval, CEO of Twitterwhich Musk is trying to buy – embraced the quest after Covid for remote work, Musk is not on board. He said people who want to work remotely “have to pretend to work elsewhere.”

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