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Tesla Layoffs: Severance Packages Revealed
Tesla recently announced a 10% reduction in its workforce, a decision that has raised concerns about what kind of severance benefits laid-off employees will receive. CEO Elon Musk notified impacted workers late in the evening on April 14 that they were immediately terminated and locked out of the company’s internal systems. Affected employees were assured that they would receive their severance details within 48 hours.
According to Business Insider, the Austin, Texas-based automaker is offering two months of severance pay to its former employees. This means that they would continue to receive payment until June 14. Notably, the severance packages do not vary based on the length of tenure at Tesla, resulting in workers with varying lengths of service receiving the same compensation.
Moreover, former Tesla employees have been given a window of “30 days or 3 months (or both)” following their termination date to exercise their vested stock options. Additionally, any accrued paid time off (PTO) leading up to the termination date will be included in their final paycheck.
Details of the Severance Package
Under the Worker Adjustment and Retraining Notification Act (WARN Act), companies with more than 100 employees are required to provide a 60-day notice before a mass layoff occurs. However, Tesla’s two-month severance offer could potentially address any penalties if found to be in violation of the WARN Act. The company is also taking the initiative to cover the cost of COBRA health insurance for two months for employees who had coverage through the company.
While the severance package is a gesture of goodwill, there are conditions attached. Laid-off workers are required to sign a contract that prohibits them from engaging in legal action or arbitration against Tesla, sharing proprietary company information, or making negative public statements about the company.
Employees who have been laid off must sign the agreement within five business days of receiving it, and they will receive severance pay for 45 days after their termination date. It is worth noting that Tesla initially provided incorrect severance information to its employees, prompting Elon Musk to issue an apology for the oversight.
For more in-depth insights into the severance benefits received by former Tesla employees, it is recommended to visit Business Insider.
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