Tesla ended reduced salaries this week, says internal email
- Tesla HR told employees this week that their reduced pay period ended June 29. Tesla cut salaried employees pay by 10% to 30% in mid-April citing Covid-19 pressures on the business.
- Tesla shares today soared after the automaker reported deliveries of 90,650 vehicles in the second quarter.
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
Tesla Employees,
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 / coaching where needed. It is also the primary way we will determine promotions, merit increases, equity awards and other recognition, as well as assess our organization and what is needed to continue to succeed.
The new Performance Acceleration 2020 launches today for all employees and will be a semi-annual process moving forward. Below are some key dates in the program:
Timeline:
Beginning June 29th: Salary Reductions End
July 1st: Performance Acceleration
July 27th: Managers Begin Delivering Performance Reviews
August 7th: Reviews Available to All Employees in Inside Tesla [an internal website]
Resources:
Performance Acceleration will be hosted on [URL removed]. To help you get better acquainted with the program, you will receive access to a resource center and a short training course later this month. These will include information regarding the new performance ratings for the program and some of the frequently asked questions about the program.
Next steps:
There's no current action you need to take, however, please keep an eye out for additional communication about upcoming resources and training for Performance Acceleration 2020. Your manager will be reaching out to you at the end of the month to discuss your review.
For more information on the Performance Acceleration 2020 Process, please reach out to your HR Partner or email [HR email address removed].
Thank you!
Tesla Talent Team