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Tesla is implementing cost-cutting measures, including unpaid leave for its employees, barely a month after CEO Elon Musk said coronavirus threat is dumb.
Elon Musk’s ego seems to have been crashed after Tesla Inc (NASDAQ: TSLA) got to surrender to the coronavirus crisis. It happened barely a month after Tesla CEO Musk called this panic ‘dumb’. Tesla will cut the salaries of all its employees according to the position of the rank.
No wonder, the stock has been trailing down for the past month, and now it seems the drop might push deeper. At the time of writing, the market price of TSLA stock was hanging precariously on a level either to breakout to the upside or crash to the lows.
It may be the best opportune time for the ambitious Tesla CEO Elon Musk to come up with a master plan which will depict the company as goal-oriented other than depending on speculations to skyrocket the stock market value.
As it is with most global shares at the moment, when coronavirus is ravaging the human way of life, Tesla might not be so lucky after all. The lockdowns are bringing down the demand for its products, with restrictions to movement disrupting the supply chain of its products.
At the ending of the first quarter of the year, Elon went to Twitter to announce that the company would set up gigafactory somewhere in Central America. However, according to how things are unfolding, it might get to be delayed by months, as always with most of Tesla’s promises.
To make matters worse, the company will be laying off 50,000 strong labor force on unpaid leave, besides the slashing of employees’ salaries by 30%. For sure Tesla and Elon now know that the coronavirus panic is not dumb.
Tesla Employees’ Fate amid Coronavirus
Tesla explained its current situation the following way:
“Our cash position at the end of Q4 2019 was $6.3 billion before our recent $2.3 Billion capital raise. We believe this level of liquidity is sufficient to successfully navigate an extended period of uncertainty.”
Tesla employees will have to bear the effect of the coronavirus on the company’s business operations. This is because most of the higher-ranked officers will continue earning a substantial amount of money to keep them up and about.
According to the company, for the U.S. employees, the Vice Presidents and above will have a 30% cut. On the other hand, the directors and above will take a 20% cut, and all other employees will get a 10% cut.