ELON Musk has announced Tesla will engage in mass layoffs, prompting ex-employees to sue the company.
10% of salaried employees will be terminated. Tesla and Musk have shrugged off the lawsuit, calling the case “trivial”.
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Tesla, which once employed 100,000 people, will cut 10% of salaried workers in a move that former employees say violates federal law.
Terminations have already taken effect, including 500 workers in a Nevada factory.
The employees’ case against Tesla is built on US Department of Labor regulation which says companies owe outgoing employees 60 days notice of a mass layoff.
The world’s richest man dismissed the lawsuit with classic Muskian casualness.
“That is a small lawsuit of minor consequence. Anything that relates to Tesla gets big headlines, whether it is a bicycle accident or something much more serious,” Musk said.
Meanwhile, Tesla employees rallying against their former boss are digging in with lawyers to prepare for a David-versus-Goliath legal battle.
“It’s pretty shocking that Tesla would just blatantly violate federal labor law by laying off so many workers without providing the required notice,” a lawyer for the employees told Reuters.
Musk, for all his business savvy, has a crisis of his own making brewing in regards to Tesla.
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Tesla’s stock is down more than $200 a share since his bid to purchase Twitter went public, in part because of shareholders’ concern that Musk will be spread too thin to run both companies (and SpaceX).
His firm stance against remote work has manifested itself in a menacing email to Tesla employees: spend 40 hours a week in the office, or resign.
He echoed the same sentiment during a Q&A with Twitter employees.
Musk said that despite the mass layoffs, only 3.5% of Tesla employees will be affected.
The company will increase the amount of staff that’s paid by the hour as opposed to taking a salary.
