A few weeks ago, Tesla laid off 500 employees who worked at the Gigafactory in Sparks, in Nevada. The company is now being sued by two of these former employees. They accuse Tesla of wrongful termination and believe the company failed to comply with federal law.
Tesla lays off 500 employees
Another stunt for Elon Musk. Definitely, 2022 is an eventful year for the billionaire at the head of SpaceX and Tesla. In early June, the boss of Tesla demanded the departure of 500 workers from his Gigafactory in Sparks. However, these employees were terminated without the 60 day notice required by law. In the complaint, the two former employees explain that “Tesla simply informed the employees that their dismissal would take effect immediately and asked them to leave”. They are seeking class action status on behalf of all U.S. Tesla employees who were fired in May or June without notice.
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Indeed, an American law called Worker Adjustment and Retraining Notification Act (WARN) requires companies to give at least 60 days notice before mass layoffs. The idea is to give employees enough time to find another job. One of the workers who filed the complaint, John Lynch, said he was told on June 10 that he was being fired, with immediate effect. According to Shannon Liss-Riordan, the attorney for two former Tesla employees, “there is no doubt: Tesla totally disregards the laws of our country”.
Elon Musk wants to cut his workforce by 10%
In addition to the immediate effect of the layoff, Tesla reportedly only offered one week of severance pay to affected employees. Following the announcement of this lawsuit, Elon Musk said in a press release that Tesla would reduce its workforce by 10%. Elon Musk also said he had a “very bad feeling” about the economy of the United States and that he had no choice but to part with these 500 employees.
In addition, thousands of workers were reportedly laid off in the United States at Tesla recently. Still so contemptuous, Elon Musk said that this lawsuit was not important and that it was “a small trial with minor consequences”. He believes that everything about Tesla makes headlines, “whether it’s a bicycle accident or something much more serious”.