Tesla will furlough all nonessential workers, cut workers’ pay by 10%, directors’ salaries by 20% and vice presidents’ salaries by 30% in an effort to cut costs during the shutdown of its U.S. production facilities due to the coronavirus outbreak. According to a report from Reuters, the news came in the form of an email to employees sent by in-house counsel Valerie Capers Workman. Employees who cannot work from home and have not been assigned to critical work onsite factories will be furloughed, and workers will retain their healthcare benefits until production resumes.

Tesla suspending production at its vehicle manufacturing plant in Fremont, California, and its solar roof tile factory in New York on March 24. The automaker currently plans to resume normal operations on May 4. The email to employees explained that pay for salaried Tesla employees will be reduced beginning on April 13 and cuts will remain in place until the end of the second quarter. 

The coronavirus pandemic has slashed U.S. demand for cars and forced several other automakers to furlough U.S. workers.

Tesla’s sole U.S. auto factory employs more than 10,000 workers, with annualized production of slightly more than 415,000 units by the end of December 2019.

The suspension interrupts a planned ramp-up in production of its Model Y sport utility vehicle at the factory. Demand for the Model Y is expected to be higher than for all of Tesla’s other models combined, Chief Executive Elon Musk said in the past. The Model Y taps into strong demand for SUVs and is much less expensive than the high-end Model X.

Tesla on March 20 said it believed it had enough liquidity to successfully navigate the extended period of uncertainty, with some $6.3 billion in cash at the end of the third quarter, ahead of a recent $2.3 billion capital raise.

The company on Thursday surprised investors with strong first quarter delivery numbers despite the coronavirus outbreak hammering nationwide car sales and said Model Y production was ahead of schedule.

Material from Reuters was used in this report.

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