The CEO had already put a stop to all new hirings around the world
This is to prepare for a possible recession
The automaker could face lawsuits due to an alleged lack of notice prior to many layoffs
Tesla will reduce the size of its workforce by 3.5% over the next three months by laying off 10% of its salaried workers, which means it will fire around 3,500 employees globally.
This had already been hinted at two weeks ago in a leaked email sent by the company’s CEO, Elon Musk, to the automaker’s executives, which also stated that the company would not be hiring any new employees until further notice.
According to Tesla, this is to reduce its fixed costs in preparation for an expected recession that could hurt the automotive industry during the next few years.
Musk has given his forecast of the upcoming global financial situation and he was not optimistic, which might be why Tesla is taking more drastic measures to save money than its competitors at the moment.
Of course, such a decision is not popular with the company’s employees, and adding fuel to the flames, it seems Tesla has not followed the rules in place to protect workers in case of a layoff.
Indeed, a lawsuit has been filed against the company by 500 former employees who have allegedly been recently fired without the 60 days of notice that are required by law.
This warning period was put in place in order to give employees time to find a new job or train to apply for another position before they are left without a paycheck.
Since a large number of plaintiffs is recorded, the legal action could become a class-action lawsuit against the automaker.