- Tesla said it plans to continue production in the U.S. facilities on May 04
- Hourly workers will be furloughed, but will continue to receive health benefits
- Pay cuts to be applied to the entire workforce
- Tesla stock price trades around 15% higher on the week
Shares of Tesla (NASDAQ:TSLA) have moved higher in the last three days on the back of the recovery in global stock markets as the electric car giant announced it will slash pay to all its employees and furlough hourly workers.
Fundamental analysis: Pay reductions in place until July
Tesla has communicated new measures to its employees as the company continues to deal with the consequences of the COVID-19 outbreak and national lockdowns across the globe. In an internal email obtained by CNBC, Tesla says it will slash pay for all employees and will furlough hourly workers until May 4, when it plans to continue its manufacturing activities.
“While we are continuing to keep only minimum critical operations running, we expect to resume normal production at our U.S. facilities on May 4, barring any significant changes,” it is said in the memo.
As of next Monday, the memo reads, Tesla will start implementing new measures to save funds, which will be in place until the end of Q2. The new actions include a pay cut for U.S. employees of 30% for Vice Presidents and above, 20% for Directors and above, and 10% for everyone else.
Internationally, similar salary cuts will be made, however, the “specifics will be communicated by the local leadership team in accordance with local laws and works-councils”.
Moreover, the hourly staff members will be furloughed. Under the new regime, these groups of workers will still receive healthcare benefits, while “certain employees will be assigned to critical functions and they will continue to report onsite”.
“As usual, for those who are onsite, if you are sick or are uncomfortable coming to work, please contact your manager and stay at home,” said Tesla in a memo.
Technical analysis: Stock price up 15% this week
Shares of Tesla are trading nearly 2% higher in the pre market trading session today, after gaining 7.55% on Monday and 5.66% yesterday. Tesla stock price now trades more than 60% higher compared to the March 18 low of $350.51.
Yesterday’s close meant that the price action managed to stay above the 100-DMA $530 mark, which will now act as a support for the bulls. On the upside, the buyers are likely to target the $600 mark as their next target in the short-term.
Shares of Tesla have made notable gains in the past two days as the electric car giant informed its employees that their salaries will be cut, while the hourly workers will be furloughed. Tesla said it plans to continue production in the U.S. facilities on May 04.