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

Mark Matousek

Mar 8, 2019, 00:27 IST

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

Joe Skipper / Reuters
Tesla CEO Elon Musk.

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

Tesla is engaging in a significant cost-cutting effort that has affected employee work schedules and the supply of some small parts used to make vehicles, CNBC reports.

CNBC describes three cost-reduction measures that Tesla has not made public:

Asking employees to work remotely and keep travel to a minimum.
Telling hourly employees at the Gigafactory - the Sparks, Nevada, factory where Tesla makes batteries and drivetrains - to leave in the middle of their shifts and asking them to take paid or unpaid time off.
A reduction in the amount of some small parts, like rivets and fasteners, available at Tesla's vehicle assembly plant in Fremont, California.

CNBC also reports that Tesla has laid off around 8% of its employees in the last 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 stores into galleries and information centers as it shifts to an online-only sales model. The move would lead to layoffs, Tesla CEO Elon Musk said during a conference call that followed the announcement, though he declined to specify the size of the layoffs. He said the layoffs were part of a cost-cutting effort designed to make a price reduction for Tesla's Model 3 sedan financially feasible.

The most recent 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 emphasize that we are making this hard decision now so that we never have to do this again," Musk said at the time.