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Elon Musk Says Tesla Severance Packages Are “Incorrectly Low”

By Nithya Bose in Business News, posted April 18, 2024

Elon Musk has told Tesla staff that the company issued extremely low severance pay to some laid-off employees this week.

An internal email read: “As we reorganize Tesla it has come to my attention that some severance packages are incorrectly low.

“My apologies for this mistake. It is being corrected immediately.”

The news comes after Tesla announced it would reduce its workforce by over 10 percent, affecting about 14,000 employees globally.

The automaker aims to streamline operations for future growth.

It includes a shift from developing a more affordable electric vehicle to focusing on the production of robotaxis.

Musk backed a report about the new focus towards robotaxis on his social media X, where he.

However, it remains unclear if Tesla will continue to follow Musk's 2023 "master plan" to achieve a sustainable global energy economy through broader electrification and sustainable electricity solutions.

Tesla has experienced a downturn in performance.

This includes with an 8.5 percent drop in deliveries in the first quarter of the year.

This marks its first decline since the 2020 disruptions caused by the global pandemic.

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The company is expected to discuss the restructuring's impact on various departments more extensively during its upcoming shareholder meeting on April 23.

In addition to operational challenges, Tesla is navigating executive compensation issues.

A recent proxy filing revealed a proposal for shareholders to approve a new CEO compensation package for Musk, similar in scale to the one granted in 2018.

This follows a court ruling that voided his previous $56 billion compensation plan due to governance concerns over board independence.

Amid these developments, Tesla's stock price has significantly decreased, falling approximately 37 percent this year.

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