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Tesla has begun sending out severance info to laid-off workers. Here's how much they're getting.

Grace Kay   

Tesla has begun sending out severance info to laid-off workers. Here's how much they're getting.
  • Tesla has begun sending severance information to laid-off staff.
  • Five former workers told Business Insider the severance offer included two months' pay and health insurance.

Tesla has started sending out severance information to laid-off employees.

Tesla CEO Elon Musk told staff the electric-car maker was slashing more than 10% of its workforce on Sunday night, according to an internal memo viewed by Business Insider. In the individual layoff notices to impacted workers that were sent in the hours after Musk's companywide email, Tesla told workers they'd receive their severance information "within 48 hours," according to emails viewed by BI.

The emails, which were sent to the workers' personal email accounts, notified staff they had been terminated effective immediately. The workers were also cut out of Tesla's internal systems around the same time, several former workers said.

The carmaker appears to be offering workers two months of severance — meaning the workers are set to be paid through June 14, as five former workers told BI. The severance packages didn't appear to be weighted based on the length of time workers had been with Tesla, as workers with anywhere from a few months to several years of experience at Tesla received the same number of weeks paid out, the five sources told BI.

Under the Worker Adjustment and Retraining Notification Act, companies that have more than 100 workers are required to provide 60 days of notice before a large-scale layoff. But Tesla's severance offer could address any potential penalties if it were found to have violated the WARN Act, which says laid-off employees can be entitled to up to 60 days of pay and benefits if not given proper advanced notice.

Tesla is also offering to pay the cost of COBRA health insurance for two months for workers who had coverage through the company, according to a severance-package offer viewed by BI.

In order to receive the severance pay, laid-off workers must sign the contract being offered, which prohibits them from participating in any lawsuit or mass arbitration against the company, sharing any of the company's trade secrets, or publicly defaming Tesla. These types of clauses are relatively standard for severance agreements.

Tesla said the severance agreement must be signed within five business days of its receipt, and workers would receive their severance pay 45 days after their termination date, according to a severance agreement viewed by BI.

While the severance information appears to have started going out overnight, several Tesla workers who were impacted by the layoffs told BI they had yet to receive severance information as of Wednesday morning.

The severance agreement didn't include any information regarding equity awards or unused PTO. An exit email that was sent to laid-off employees on Tuesday said Tesla workers had "either 30 days or 3 months (or both)" from their termination date to exercise their vested stock options, and staff would have their PTO that they'd accrued leading up to their termination date paid out in their final paycheck.

A spokesperson for Tesla didn't immediately respond to a request for comment.

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