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Elon Musk says in email that Tesla sent ‘incorrectly low’ severance to some laid-off employees

In Business
April 18, 2024

Elon Musk, Chief Executive Officer of Tesla and owner of X, formerly known as Twitter, attends the Viva Technology conference dedicated to innovation and startups at the Porte de Versailles exhibition center in Paris, France, June 16, 2023. 

Gonzalo Fuentes | Reuters

Tesla CEO Elon Musk sent an internal email on Wednesday, telling staffers that the company sent out some severance packages that were too low to a number of laid-off workers this week.

“As we reorganize Tesla it has come to my attention that some severance packages are incorrectly low,” Musk wrote in the brief email. “My apologies for this mistake. It is being corrected immediately.”

Tesla didn’t immediately respond to a request for comment.

The electric vehicle company said on Monday that it would be cutting more than 10% of its global workforce, which totaled around 140,000 employees at the end of 2023.

Few details have been shared by the company about the layoffs, but in a companywide memo sent on Monday, Musk said the layoffs would help, “prepare the company” for a “next phase of growth.”

Earlier this month, Reuters reported that Tesla would be shifting its strategy, and scrapping an earlier plan to produce a more affordable EV in favor of focusing on robotaxi development at Musk’s direction. On Tuesday this week, Musk appeared to confirm that report in a post on X.

Musk hasn’t yet said whether Tesla will stick with his 2023 “master plan,” which laid out “a proposed path to reach a sustainable global energy economy through end-use electrification and sustainable electricity generation and storage.”

The company reported an 8.5% year-over-year decline in first-quarter deliveries, the first drop since 2020, when operations were disrupted by the global pandemic.

Tesla is set to discuss first-quarter results with shareholders on April 23, and executives are likely to reveal more about the restructuring and which departments were most impacted.

In a proxy filing out on Wednesday, Tesla asked shareholders to approve a CEO pay package for Musk that’s equivalent to the record compensation plan the company previously granted him in 2018.

His earlier CEO pay plan, worth $56 billion, was voided in a ruling by Delaware chancery court judge Kathaleen McCormick, who decided that, as CEO, Musk controlled Tesla, and the board’s compensation committee wasn’t independent, among other factors.

Tesla shares have dropped about 37% this year as of Wednesday, closing at $155.45.

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