In an unprecedented turn of events, Tesla CEO Elon Musk has acknowledged that some severance packages given to laid-off employees were incorrectly low. In a companywide email on Wednesday, Musk apologized for the mistake and assured that it was being corrected immediately.
Tesla is currently undergoing a major restructuring, with more than 10% of its global workforce being cut, which amounts to around 140,000 employees at the end of 2023. The layoffs aim to prepare the company for its next phase of growth.
Musk didn't elaborate on the details of the layoffs or why some severance packages were incorrectly low. However, he assured that the issue was being addressed promptly.
This incident comes amidst a challenging period for Tesla, as it faces a sharp slowdown in sales and rising competition from domestic manufacturers in China, its most important market outside the US. Additionally, Tesla recently lost some senior executives amidst the cuts.
Despite these challenges, Musk remains confident about the future of Tesla and is pushing for major changes to the company's strategy. However, his recent actions have raised eyebrows and sparked controversy among shareholders and industry experts alike.
In a separate development, Musk is also grappling with lawsuits filed by four former executives of Twitter, now known as X. They are suing him for $128 million in unpaid severance. The plaintiffs were fired after Musk's takeover of Twitter in 2022 and include former CEO Parag Agrawal; Ned Segal, the company's former chief financial officer; Vijaya Gadde, its former legal chief; and Sean Edgett, its former general counsel.
As Tesla continues to navigate these challenges and restructure for future growth, it remains to be seen how these recent developments will impact the company's trajectory and Musk's leadership. However, one thing is clear: under Musk's leadership, Tesla will continue to push boundaries and challenge traditional norms in the automotive industry.
