
Tesla to Cut Employees’ Pay as Much as 30% to Curb Costs - JumpCrisscross
https://www.bloomberg.com/news/articles/2020-04-08/tesla-to-cut-employees-pay-as-much-as-30-to-curb-costs-k8qrmfkl
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jcims
Nissan and Honda just laid off/furloughed over 10k each.

[https://asia.nikkei.com/Spotlight/Coronavirus/Nissan-and-
Hon...](https://asia.nikkei.com/Spotlight/Coronavirus/Nissan-and-Honda-plan-
thousands-of-US-layoffs-and-furloughs)?

I live about three miles from one of the affected assembly plants. It's pretty
tough.

FTA:

"The affected employees will not be paid by Nissan after being laid off,
though it appears that the company will rehire them once the plants restart
production. The workers will draw unemployment benefits until then.

Nissan also plans to lay off most of its 6,000 employees at its U.K. plant and
about 3,000 workers at a factory in Barcelona, Spain.

Honda, which built 1.2 million cars in the U.S. in 2019, suspended production
at its factories there on March 23. The automaker will guarantee full wages
until Sunday. The company will instruct the workers to apply for unemployment
benefits from their local governments starting Monday."

~~~
_bxg1
My company recently furloughed some people, and at least in our case, they got
to keep health insurance. Normally that would be cold comfort, but... right
now it's pretty important.

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jcims
Yes i believe both Nissan and Honda are maintaining health insurance. Totally
agree. Can't imagine 30 days in an ICU on a ventilator would be inexpensive
here in the states.

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dmoy
30% cut for VP+, 20% for director, 10% others

At least it's progressive?

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Robotbeat
Seems kind of questionable to lead the headline with 30% cut for employee pay
when it's a 30% cut for the top level executives.

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eropple
* > Employees who haven’t been assigned to critical tasks and who can’t work from home will be furloughed without pay, though they will keep health-care benefits.*

Sounds like a 100% cut for most folks, less whatever inadequacy our
unemployment insurance system pays out.

~~~
philipov
Does unemployment insurance even pay out if you've been furloughed without
pay, but still technically have a job?

~~~
duxup
In the US generally speaking yes.

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michaelbrave
My brother works at GM, they did a 20% paycut to everyone, I want to say the
leadership took larger ones like 30% but I can't completely remember.

~~~
lukejduncan
It’s actually a pay deferral. They’ll get the money just at a later date

[https://www.freep.com/story/money/cars/general-
motors/2020/0...](https://www.freep.com/story/money/cars/general-
motors/2020/03/26/gm-salaried-workforce-must-take-pay-cut-due-coronavirus-
impact/2921448001/)

~~~
ksec
I think Pay deferral is a much better solution. It is hard to ever get a pay
rise after a pay cut. That is why Salary raise on the whole dont catch up as
fast as economy after 2008.

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seattle_spring
Doesn't Tesla already underpay relative to other tech companies?

~~~
mulmen
Well Tesla isn't a tech company. They should really only be compared to other
auto manufacturers and maybe some dealers.

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systemvoltage
Just curious, how do you define what a tech company is?

~~~
philipov
It's a really strange label. I think most people define it as "Whatever those
crazy guys in Silicon Valley are doing/funding," because I can't imagine a
world where there exists automotive manufacturing that _isn 't_ considered
technology.

~~~
systemvoltage
In addition, I think the definition of the term "Technology" is quite broad.

According to the Oxford dictionary,

Technology:

    
    
      The application of scientific knowledge for practical   purposes, especially in industry.
    

In the formal terms, tech industry is all industry that relies on scientific
knowledge to gain leverage. What large industry today doesn't involve using
science in some form or the other? Perhaps the industry of religion. It is
hard to find one and there is a gradual curve between least scientifically
based industry to the most.

~~~
philipov
Exactly. It feels like the term was invented by people who think that
Information Technology is the only technology worth mentioning, and that's a
bit perverse.

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RickJWagner
Funny how whenever there is good or exciting news, it's 'Elon Musk' that's
quoted.

But bad news like this comes from 'Tesla'.

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sharpemaster
Musk is getting closer and closer to his $1B in options. Tesla is at ~$100B
market cap as of 4/7\. They need this to hold until late July. Musk is doing
whatever he can to keep the markets happy; not sure it’s going to be enough

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nurettin
> In the U.S., the salary cut is 30% for vice presidents and above, 20% for
> directors and above, and 10% for others

That looks like a nice, reasonable gradient. I wonder what it looks like when
divided by relative wages.

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new_realist
The factory will restart one month into the quarter, but the pay cuts will
persist for two months after that. Classy.

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neonate
[https://archive.md/0Kemu](https://archive.md/0Kemu)

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new_realist
Meanwhile, Elon’s private yet burns $5K an hour and has flown an average of
2,200 miles per day, every day, for the last three months.

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bpodgursky
> In the U.S., the salary cut is 30% for vice presidents and above, 20% for
> directors and above, and 10% for others, according to an internal memo seen
> by Bloomberg. Workers outside the U.S. will see similar reductions.
> Employees who haven’t been assigned to critical tasks and who can’t work
> from home will be furloughed without pay, though they will keep health-care
> benefits.

Come on, this is even in the paywall blurb. Common employees are at a 10% cut.

If they can get idle factories without mass layoffs, good for them and for
their workforce.

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m_eiman
> Employees who haven’t been assigned to critical tasks and who can’t work
> from home will be furloughed without pay, though they will keep health-care
> benefits.

That sounds more like 100% than 10% to me.

~~~
modeless
But those employees will be eligible for CA unemployment insurance, which will
pay them a large fraction of their normal pay for 26 weeks, plus the new $600
weekly federal checks (which in the case of part time or low paid employees
can actually make their unemployment checks larger than their regular after
tax pay).

~~~
Rebelgecko
CA unemployment insurance is capped at $450, right?

~~~
modeless
But with the federal stimulus it's $1050. Plus the payments are exempt from
several taxes that are normally deducted from wages. And you don't have to
look for work. And of course separately there's the extra $1200 federal
stimulus check.

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throwaway122378
Wow

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m0zg
I take it they're planning to cut the prices on their products to match, this
being "shared sacrifice" and all? Rhetorical question, I know.

On a more serious note, why not cut the hours by the same percentage,
maintaining hourly pay equivalent? Seems like this would fit the definition of
"shared sacrifice" a bit better. You give up some, company gives up some.

My wife is an independent contractor. Her client asked her to go part-time,
same hourly pay. It's great. The client gets to pay less, she gets a much
deserved break.

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avalys
Shared sacrifice would be _you_ volunteering to pay _more_.

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jedberg
I think this is just an excuse to cut salaries. I’m not sure their revenue is
down.

If you go on their website and try to order a new model 3, it still says it’s
a 9 week wait.

And last I heard their factories never stopped running because they got
themselves declared essential.

So at least from the outside, it seems like their revenue hasn’t changed.

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pengaru
> And last I heard their factories never stopped running because they got
> themselves declared essential.

RTFA:

Tesla agreed to idle U.S. production last month amid authorities’ orders,
choking off the supply of cars to customers. The electric-vehicle maker
expects to resume normal production at its U.S. facilities on May 4, according
to the memo.

