Car Industry

Tesla furloughs half of sales and delivery workers over coronavirus, report says

Tesla once wanted to move to a totally online sales method, but the company changed course.

Some employees said they fear the furloughs will turn into layoffs.
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Tesla has reportedly furloughed half of its sales and delivery employees across the US, according to a report from CNBC on Friday.

The report cites a handful of Tesla employees familiar with the decision, who said managers delivered the news to employees today. A Tesla spokesperson declined to comment on any internal news and did not speak to the reported furloughs.

The automaker's plan to enact the furloughs reportedly comes after the company developed plans to battle hardships faced due to the coronavirus. These plans called for furloughs to all non-essential, hourly employees and a cut to salaried employees' pay, according to the report. The same plans called for Tesla's plant in Fremont, California, to reopen and resume production on May 4. Other automakers also target similar timeframes. Tesla's only US car production plant shut down last month after mounting criticism to comply with a local shelter-in-place order. Nevertheless, Tesla posted positive vehicle delivery figures for Q1, despite the pandemic.

The sources said the furloughs will take place based on rank and tenure. Any entry level sales or delivery person is automatically included in the furlough, as are salespeople with declining sales quotas each quarter. The upper reach of the furloughs hits those in more senior sales and delivery roles who've been with the company for fewer than two years.

While the furloughs are reportedly in direct response to the pandemic, some employees told CNBC they're afraid they may turn into layoffs. Tesla faced an uproar when it said in 2019 it planned to move to an online-only sales method. Instead, CEO Elon Musk said stores with high visit rates that led to "significant sales" would remain open.

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