People looking at a Tesla car on display at a showroom in Beijing.
Noel Celis | AFP via Getty Images
Tesla told employees it ended a season of reduced pay for its salaried workers on June 29, 2020, as expected, according to internal correspondence obtained by CNBC.
In mid-April, the electric vehicle company cut pay for salaried employees by 10% to 30% depending on their position. At the time, Tesla cited Covid-19 pressures on the business as a justification for the pay cuts, and said they expected them to last until some time around the second quarter of 2020.
In a new HR email, which was sent to Tesla’s global employees by Human Resources on Wednesday July 1, Tesla reiterated details about a forthcoming performance review process.
Throughout the past decade, Tesla has switched schedules for its performance reviews, causing some employees to miss out on months of higher pay, or chances to receive bonuses or more senior titles before layoffs eliminated their roles entirely.
On Thursday, Tesla shares soared after the automaker reported that it delivered 90,650 vehicles in the second quarter handily beating Wall Street expectations. CEO Elon Musk sent a “congratulations” email and thanked employees for their work during the stressful quarter the day before the delivery report, a vague nod to the fact employees had worked through a Covid-19 pandemic.
The outbreak temporarily shuttered some of Tesla’s operations during the quarter, including its car plant in Fremont, California, and battery factory outside of Reno, Nevada.
Musk also thanked Tesla shareholders in a tweet for supporting his business, which has been publicly traded on Nasdaq for 10 years, but has not yet achieved a full year of profitability. Shares closed up 8% on Thursday, a day after Tesla’s market cap surpassed that of Toyota, making it the most valuable car company in the world.
Cutting pay for employees, and delaying merit increases, promotions and bonuses lowered some of Tesla’s costs this quarter, and may have helped the company get close to the goal of positive net income in the second quarter of 2020. It has shown profits for the last three quarters, and a profit in Q2 would potentially let the company qualify for inclusion in the S&P 500.
Earnings reports from Tesla usually follow their vehicle delivery reports by about a month. Steep cuts to headcount have followed performance reviews at Tesla in the past.
Here’s what the Human Resources department said in the email to US Tesla employees this week, as transcribed by CNBC:
To: Tesla Talent
From: Tesla Talent Team
Subj. Performance Acceleration 2020 Program Launch
Date: July 1, 2020
As a followup to Valerie’s email from June 17, today we are kicking off Tesla’s new performance review program, Performance Acceleration 2020. Performance Acceleration 2020 is how we as an organization will evaluate performance, offer feedback, set clear goals and expectations, celebrate strengths and provide support /…
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