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Tesla Model S and Model X production most affected by layoffs, report says

A new report shows that Model S and Model X production programs were the most affected by Tesla’s layoffs, and it comes as the automaker killed the least expensive versions of those vehicles.

Last week, Tesla announced that it was laying off 7% of its workforce in order to focus on profitability.

Today, CNBC published a report citing current and recently laid off employees to give some color to the recent round of layoffs:

“According to an ex-employee who was involved in Tesla’s delivery operations, and a current employee who works for Tesla in Fremont, the layoffs appear to have impacted workers across every department and region from factory workers to recruiters and receptionists. But deep cuts apparently hit Tesla’s delivery, sales and Model S and X production teams.”

The cuts in the Model S and Model X program come after Tesla announced that it is discontinuing the 75 kWh battery pack for Model S and Model X.

Tesla commented on the situation:

“We recently announced that we are no longer taking orders for the 75 kWh version of Model S and X in order to streamline production and provide even more differentiation with Model 3. As a result of this change and because of improving efficiencies in our production lines, we have reduced Model S and X production hours accordingly. At the same time, these changes, along with continuing improvements, give us the flexibility to increase our production capacity in the future as needed. We’ll be providing more details on our earnings call next week.”

CNBC also shared details about the separation agreement that Tesla has been offering to employees being laid off.

Employees are reportedly receiving 60 days of salary and benefits whether they sign the agreement or not.

Those who do sign the agreement can get extended medical coverage and additional severance pay, but they have to agree to several things:

  • Promise not to “disparage Tesla” including the company’s officers, directors, employees, shareholders, agents, affiliates, subsidiaries, and products in any way that’s “Likely to be harmful to them or their business, business reputation or personal reputation.”
  • Refrain from sharing details about their separation agreement with the public, or with other current or former Tesla employees and contractors.
  • Cooperate with Tesla in connection to claims against or by the company– this means laid off employees would share names or correspondence with Tesla if called on, and appear in court or be deposed without the company issuing a subpoena.
  • Resolve disputes around the separation agreement through arbitration, instead of in a class action suit for example.

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