EV giant Tesla has reportedly begun informing affected employees about their severance packages following the recent layoffs.
What Happened: Tesla is offering a severance package that includes two months of pay and covers the cost of COBRA health insurance for the same period for affected workers, Business Insider reported, citing five former employees.
To receive the severance package, workers must sign a contract that prohibits any lawsuit or public defamation of the company, among other things. The contract must be signed within five days of receipt, and the severance pay will be issued 45 days after the termination date.
Why It Matters: Under the Worker Adjustment and Retraining Notification Act (WARN Act), companies with more than 100 employees are required to provide 60 days of notice before a large-scale layoff, as per the report.
Tesla’s severance offer could address any potential penalties if it were found to have violated the WARN Act, which allows laid-off employees to be entitled to up to 60 days of pay and benefits if not given proper advanced notice.
On Monday, Tesla laid off about 14,000 employees, or 10% of its global workforce, via email to cut costs and eliminate duplicate roles.
“About every five years, we need to reorganize and streamline the company for the next phase of growth,” company CEO Elon Musk said on X about the sweeping job cuts.
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Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.
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