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Tesla furloughs employees due to drop in demand amid crisis

Tesla has announced that it is going to put some employees on furlough due to a drop in demand amid the current coronavirus crisis.

An email from Axel Tangen, Tesla’s director of Northern Europe, to employees in Norway states that Tesla plans to temporarily lay off some workers due to demand slowing down (via Business Insider):

In plain terms, our current capacity is higher than the actual work available to us, due to uncertainty and restrictions caused by the coronavirus outbreak. Sadly, this means that our staffing need will be lower than normal for some time to come. We are confident that this trend will reverse as the outbreak is contained and Norwegians return to their daily lives, but we need to take action to ensure there is a place to work for us all when things return to normal.

The executive said that the layoffs would start in April, but he didn’t specify how many people would be affected.

He wrote:

We will talk individually with the employees affected by the layoff. Initially, they will be laid off for the month of April. The employee and safety representatives will meet with management on a weekly basis to evaluate the current situation.

Tangen also said that “Tesla will decide which employees will be furloughed based on the necessity of their role, the amount of time they’ve worked for the company, and particularly compelling social conditions.”

Unsurprisingly, automotive sales are down around the world as the coronavirus is slamming on the brakes of the world’s economy and people are delaying major purchases, like cars.

Sources familiar with Tesla sales told Electrek that the automaker is seeing very few new orders and a lot of cancellation over the last few weeks.

In the US, Tesla is still delivering new cars, especially the Model Y, which just launched.

Tesla was also forced to close stores in the US, but not of its own volition. Many of its stores are located in malls that were closed due to the coronavirus crisis.

At the time, a source familiar with Tesla’s retail division told Electrek that the automaker plans to temporarily transfer the employees to its delivery operations.

Norway is one of Tesla’s biggest markets with hundreds of employees across over a dozen stores and service centers.

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