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Tesla sent some laid off-workers “incorrectly low” severance packages. Wikimedia Commons

Tesla CEO Elon Musk acknowledged in an email to recently laid-off staff that some employees may have received incorrectly low severance offers. This comes after the company began notifying staff about their severance packages.

"As we reorganise Tesla, it has come to my attention that some severance packages are incorrectly low," Musk wrote in the brief email. "My apologies for this mistake. It is being corrected immediately."

On Monday, electric vehicle manufacturer Tesla announced a workforce reduction plan impacting over 10 percent of its global staff. This decision, unfortunately, resulted in the layoff of approximately 140,000 employees. There have been reports of some affected workers being unaware of their termination until their badge scans denied them entry to company facilities.

According to five former Tesla employees who spoke to Business Insider, the company's severance package appears to be standardised at two months' pay. This translates to continued compensation through June 14, 2024.

Beyond Job Cuts: Examining Tesla's Severance Offers

These sources also indicated that the severance offers aren't based on seniority. In other words, employees with a few months of experience received the same number of weeks of pay as those with Tesla for several years.

The Worker Adjustment and Retraining Notification Act (WARN Act) mandates that companies with over 100 employees provide a 60-day notice before mass layoffs.

Tesla's severance package, offering two months' pay, could mitigate any repercussions if found to have violated the WARN Act. This act entitles workers to up to 60 days of salary and benefits if laid off without proper notice.

Tesla offers two months of COBRA health coverage (severance doc viewed by BI). To get paid, laid-off workers must sign a severance agreement (within five days), which includes standard restrictions: no lawsuits, secrets, or bad-mouthing Tesla. They'll receive pay 45 days after termination (per agreement).

While Tesla remains tight-lipped about specific details surrounding the layoffs, in a company-wide memo on Monday, Musk stated the move is intended to "prepare the company for its next phase of growth."

Uncertain Future: Tesla's Silence on 2023 Master Plan

Reuters recently reported a strategic shift at Tesla, claiming the Musk-led EV maker has abandoned its plan to offer an affordable electric vehicle. Instead, the report said that Tesla would focus on robotaxi development in Musk's direction.

Musk confirmed this news in a recent post on X, though the details remain unclear. It is unclear whether the tech mogul plans to deviate from his 2023 "master plan," which laid out "a proposed path to reach a sustainable global energy economy through end-use electrification and sustainable electricity generation and storage."

Tesla's first-quarter deliveries fell 8.5 percent year-over-year, marking their first decline since the disruptions caused by the global pandemic 2020. The electric vehicle giant will hold its first-quarter earnings call with shareholders on April 23.

Tesla is expected to address the recent restructuring with shareholders. This discussion will likely shed light on the departments most affected by the workforce reduction.

On Wednesday, Tesla filed a proxy statement requesting shareholder approval for a CEO pay package for Elon Musk. This proposed package mirrors the record-breaking compensation plan awarded to Musk in 2018.

A Delaware chancery court judge, Kathleen McCormick, voided the business magnate's previous £44 billion ($56 billion) CEO pay package. The judge's decision cited concerns about Musk's influence over Tesla and questioned the independence of the board's compensation committee, among other factors.

Tesla's stock price has fallen roughly 37 percent year-to-date, closing at £124.67 ($155.45) on Wednesday.